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IC 8917 



Bureau of Mines Information Circular/1983 




Aluminum Availability-Market Economy Countries 



A Minerals Availability Program Appraisal 



By G. R. Peterson and S. J. Arbelbide 




UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 8917 

Aluminum Availability-Market Economy Countries 

A Minerals Availability Program Appraisal 
By G. R. Peterson and S. J. Arbelbide 




UNITED STATES DEPARTMENT OF THE INTERIOR 
James G. Watt, Secretary 

BUREAU OF MINES 
Robert C. Norton, Director 






iff 



h?^^ 



This publication lias been cataloged as follows: 



Library of Congress Cataloging in Publication Data 

Peterson, Gary R., 1948- 

Aluminum availability-market economy countries. 

(Information circular /Bureau of Mines ; 8917 ) 
Includes bibliographical references. 
Supt. of Docs. no. : I 28.27; 8917 

1. Aluminum. 2. Bauxite. I. Arbelbide, S.J. (Sylvia J.) II. Title. 

III. Series: Information circular (United States. Bureau of Mines) ; 8917 

-TN49a^5P48 W82- 553.4'926 82-600327 



cr 

^ PREFACE 

vs The Bureau of Mines Minerals Availability Program is assessing the worldwide 

^ availability of nonfuel minerals. It identifies, collects, compiles, and evaluates information 

T> on active and developing mines, explored deposits, and mineral processing plants 

^ worldwide. Objectives are to classify domestic and foreign resources, to identify by cost 

~~^ evaluation resources that are reserves, and to prepare analyses of mineral availabilities. 

-^ This report is part of a continuing series of reports that analyze the availability of minerals 

Vj from domestic and foreign sources and factors affecting availability. Questions about the 

Minerals Availability Program should be addressed to Chief, Division of Minerals 

Availability, Bureau of Mines, 2401 E St., NW., Washington, D.C. 20241. 



-~Q 



CONTENTS 



Page 

Preface i 

Abstract 1 

Introduction 2 

Acknowledgments 3 

The world aluminum industry 3 

Importance of secondary (scrap) recovery to the 

industry 5 

Demand for aluminum 5 

The impact of OPEC and the formation of the IBA . . 6 

Identification and selection of bauxite deposits 6 

Bauxite mining and processing 10 

General 10 

Mining 10 

Bayer process for alumina production from bauxite . 10 

The Hall-Heroult process 10 

Costs of aluminum production 11 

Mine and mill capital costs 11 

Mine and mill operating costs 11 

Australia 12 

Brazil 12 

Guinea 12 

Guyana 13 

Jamaica 13 

Levies, royalties, and transportation 13 

Cost elements of alumina refining 14 

Capital costs 14 

Operating costs 15 



Page 

Raw materials 15 

Energy requirements 16 

Labor costs 16 

Transportation 16 

Cost elements of alumina smelting 16 

Capital costs 16 

Operating costs 17 

Raw materials 17 

Labor 17 

Energy costs 17 

Resource-availability curves 20 

Availability of aluminum from world bauxite 

resources 20 

General 20 

Potential total aluminum production 21 

The Caribbean 22 

Latin America 22 

Europe 22 

Asia 22 

Oceania 22 

Africa 23 

Potential annual aluminum production 23 

Conclusions 24 

References 25 

Appendix A. — Tables 26 

Appendix B. — Geology of selected deposits in major 

bauxite-producing regions 30 



ILLUSTRATIONS 

1 . Flowchart of the MAS evaluation procedure 2 

2. Reserve-base and inferred reserve-base classification categories 6 

3. Total potential aluminum production from bauxite resources in market economy countries 21 

4. Total potential aluminum production from Caribbean bauxite 22 

5. Total potential aluminum production from Latin American bauxite 22 

6. Total potential aluminum production from European bauxite 22 

7. Total potential aluminum production from Asian bauxite 22 

8. Total potential aluminum production from bauxite in Oceania 23 

9. Total potential aluminum production from African bauxite 23 

10. Potential annual aluminum production from bauxite resources in market economy countries at 

various cost levels including a 1 5-pct DCFROR 23 



TABLES 



1 . World bauxite production 4 

2. U.S. imports of crude and dried bauxite 4 

3. World alumina production 4 

4. U.S. imports of alumina 4 

5. World primary alumina production 5 

6. Bauxite resource information for market economy countries 7 

7. Bauxite property information, January 1 980 8 

8. Bauxite levies and royalties in the main bauxite-producing countries 13 

9. Selected bauxite shipping costs 14 

1 0. Operating costs of bauxite production 14 

1 1 . Typical alumina refinery capital costs 15 

12. Estimated refinery operating costs for processing Caribbean bauxite in the United States 15 

13. Estimated refinery operating costs for processing West African bauxite in the United States 15 

14. Estimated refinery operating costs for processing West African bauxite in Western Europe 16 

15. Estimated refinery operating costs for processing Australian bauxite in Australia 16 

16. Freight rates for shipment of alumina on principal international routes in 1980 17 

17. Capital costs of typical aluminum smelters for cost model 17 

18. Estimated operating costs for smelting aluminum in the United States 18 

19. Estimated operating costs for smelting aluminum in Western Europe 18 

20. Estimated operating costs for smelting aluminum in Japan 18 



IV 

Page 

21 . Estimated operating costs for smelting aluminum in Australia 18 

22. Electric power prices at selected aluminum smelters, 1980 19 

23. Average operating costs of producing aluminum operations 19 

24. Estimated average operating costs of nonproducing (potential) aluminum operations 19 

25. Potential aluminum production and average total costs for producing and nonproducing 

operations in market economy countries 21 

A-1 . Assumed location of refineries and smelters for the study 26 

A-2. Capital costs of alumina refineries 28 

A-3. Capital costs of aluminum smelters , 29 

A-4. Deposits and mines investigated but not included in this study 29 



ALUMINUM AVAILABILITY— MARKET ECONOMY COUNTRIES 
A Minerals Availability Program Appraisal 

By G. R. Peterson^ and S. J. Arbelbide' 



ABSTRACT 

To determine the availability of aluminum from world bauxite resources, the Bureau of 
Mines investigated 139 bauxite deposits worldwide and evaluated the potential production 
of aluminum based on the demonstrated resources of bauxite ore from 91 mines and 
deposits in 22 market economy countries. 

The demonstrated resources of the bauxite mines and deposits included in this study 
represent an in situ resource of 20.2 billion metric tons of bauxite. Total identified bauxite 
resources in market economy countries amount to roughly 31.9 billion tons. Of the 
demonstrated resource, some 18.8 billion tons of bauxite considered minable provide a 
production potential of 3.6 billion tons of primary aluminum. 

Given the wide geographic distribution of bauxite deposits, stable supplies of bauxite for 
aluminum production seem assured well into the next century. However, a tight market 
situation could develop during the 1990's unless the real price of aluminum increases 
enough to stimulate massive new investments in production capacity, particularly in 
refining and smelting. This study indicates that a real price of at least $0.85 per pound (in 
January 1980 dollars) would be necessary to stimulate the required investments and 
provide a sufficient rate of return on invested capital. 



' Mineral economist. 

^ Geologist. 

Both authors are with the Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 



INTRODUCTION 



Demand for aluminum has grown at nearly 8 pet annually 
over the past two decades. Although this rate of growth is 
expected to decline to less than 5 pet through the end of the 
century (9. p. 42).' new bauxite sources will have to be 
developed and new alumina refineries and aluminum 
smelters will have to be built to satisfy the demand. 

Although the Bureau of Mines and aluminum companies 
have conducted extensive research into the potential of 
domestic nonbauxitic sources of alumina, such as alunite, 
anorthosite, and clays (18). for the foreseeable future 
bauxite ore will most likely remain the sole commercial 
source of alumina for smelting into aluminum. Reasons for 
this include the following (15): 

1. The aluminum industry is based on Bayer processed 
bauxite. A significant shift to another process and material 
would involve major technological changes requiring mas- 
sive capital investments. 

2. The aluminum industry has major overseas invest- 
ments in the mining and processing sectors and in shipping 
installations. 

3. The present industry-Government joint ownership of 
mines and other installations in some countries is based 
upon long-term agreements. 

4. Processes for producing aluminum from kaolin and 
alunite cannot yet compete economically with the Bayer-Hall- 
Heroult technologies for producing aluminum from bauxite 
ore. With current state-of-the-art technology, the higher 
energy requirements for processing nonbauxite sources of 
aluminum in an era of high energy costs drastically reduce 
their production potential. 

The major world bauxite resources are in West Africa, 
Australia, northeastern South America, and the Caribbean. 
Significant bauxite resources also exist in Europe and Asia. 
Limited metallurgical-grade bauxite reserves in the United 
States amount to some 38 million tons' or about 1 .8 pet of the 

^ Italicized numbers in parentheses refers to items in the list of references 
preceding the appendixes at the end of the report. 
" Unless otherwise noted, "tons" in the report refers to metric tons. 



reserve base for market economy countries.^ Approximately 
96 pet of the aluminum produced in the United States is 
derived from foreign-source bauxite. Because of this 
dependence on foreign sources for such an essential raw 
material and because of its importance to the U.S. economy, 
this report identifies and assesses the potential availability of 
aluminum produced from bauxite resources in market 
economy countries. 

The data collected for this report are stored, retrieved, and 
analyzed in a computerized component of the Bureau of 
Mines Minerals Availability System (MAS). After a deposit 
was included in the analysis, an evaluation of the operation 
was begun. The flow of the MAS evaluation process from 
deposit identification to development of availability informa- 
tion is illustrated in figure 1 . This flowsheet demonstrates the 
various evaluation stages required to estimate the potential 
availability of aluminum from bauxite ore. 

It is assumed in this study that each bauxite mine or 
deposit is part of a vertically integrated aluminum operation 
and that the owner of each deposit either controls its refining 
and smelting capacity or has the downstream processing 
performed on a toll-charge basis. With this assumption, the 
quantity of aluminum potentially available from the bauxite 
ore of each deposit can be estimated, as well as the 
long-run aluminum price required to bring about production 
from each potential operation or to keep existing producers in 
operation. The following factors had to be determined before 
the total production potential of aluminum from each 
operation could be ascertained: 

1. The approximate annual production level of each 
bauxite deposit over the life of the mine. 

2. The total capital and operating costs for each bauxite 
mine and mill. 



^ fVlarket economy countries are defined by the Bureau of Mines as all 
countries that are not considered central economy countries. Central economy 
countries comprise Albania, Bulgaria, China, Cuba, Czechoslovakia, German 
Democratic Republic, Hungary, Kampuchea, Laos, Mongolia, North Korea, 
Poland, Romania, the U.S.S.R., and Vietnam. 





dentlfication 
and 














{" Mineral ^ 
Industries 1 
' Location 1 
' System 1 
1 (MILS) 1 
1 data 1 

MAS 

computer 

data 

base 


se lection 
of deposits 






















Tonnage 

and grade 

determination 






























^ 




Enginee ring 

and cost 

eva 1 uation 


















i 






' 1 




Deposit 

report 

preparation 


MAS 

per manent 

deposit 

files 




' 


1 


' 



























Data 

se I ection and 

va I Idation 



Taxes, 
royalties, 
cost indexes, 
prices, etc... 



Variable and 
parometer 
adjustments 



Economic 
analysis 



Sensitivity 
analysis 



Data! 



Availability I 
curves I 



Analytical 
reports 



iy 



Data 



Availobility 
curves 



Analytical 
reports 



Figure 1. — Flowchart of the MAS evaluation procedure. 



3. The cost of transporting bauxite to an alumina refinery 
or refineries. 

4. Tlie total capital and operating costs for each refinery or 
an estimate of the toll charge for alumina refining including 
depreciation and profit. 

5. The cost of transporting alumina to an aluminum 
smelter or smelters. 

6. The total capital and operating costs for each smelter or 
an estimate of the toll charge for aluminum smelting including 
depreciation and profit. 

For currently producing aluminum operations, the de- 
signed mining, refining, and smelting production rates and 
capacities and other available production specifics were 
adapted for use in this study. For potential operations, 
appropriate mining and processing methods and production 
rates were based on existing mines, refineries, and smelters 
as models, and on current engineering principles. 

When available, actual minmg capital and operating costs 
were used. However, where actual cost data were not 
available, costs were either estimated by standardized 
costing techniques or developed by the Bureau of Mines 
Cost Estimating System (CES), a computerized version of 
the Bureau of Mines capital and operating cost manual (22). 
Data collection and cost estimation were performed under 
contract; personnel of the Bureau of Mines Minerals 
Availability Field Office in Denver, Colo., analyzed and 
evaluated the data. Actual refinery and smelter capital and 
operating costs were used when available; otherwise the 
capital and operating costs used were from cost models that 
were developed. Data were also collected from such other 
sources as professional journals, industry publications, and 
individual companies. Costs for nonproducing operations 
were derived from the above sources as well as from the 
International Bauxite Association (IBA) and feasibility studies 
on "greenfield"' refining and smelting projects. 

Where an individual mine feeds more than one refinery, 
the transportation costs to the refineries and the refining 
costs were calculated on a weight-averaged basis. If the 
alumina goes to more than one smelter, the transportation, 
costs and smelting costs were also weight-averaged. 
Although an effort was made to simulate the actual flows 



from producing mines through the smelting stage, the scope 
of this study does not include an effort to match exactly the 
capacities of existing alumina refineries and aluminum 
smelters. For nonproducers, the materials flows are "best 
guess" estimates of where future capacity will be con- 
structed. The assumed locations of alumina refineries and 
aluminum smelters to process the bauxite and alumina from 
each deposit are shown in table A-1 in appendix A. Refinery 
and smelter location is a critical assumption for a cost study 
of this type since refining and smelting account for the bulk of 
the capital and operating costs of an aluminum operation. 

The following objectives served as guidelines in the 
conduct of this study: 

1 . To determine the demonstrated resources of significant 
bauxite deposits in market economy countries. Estimates of 
identified resources are also mentioned; however, in the 
availability analysis, only demonstrated resources are 
included. This was done because of the higher level of 
confidence in geologic and cost data at the demonstrated 
level and because of adequate demonstrated resources of 
bauxite to fulfill demand well into the future. Assuming that 
annual world production of bauxite remained steady at the 
1980 level of 90 million tons, demonstrated resources of 22.8 
billion tons would be adequate for about 253 years. 

2. To evaluate the quantity of potential aluminum produc- 
tion from bauxite resources in market economy countries in 
relation to physical, technological, political, and other factors 
that affect bauxite production from each deposit. 

3. To estimate (a) capital investments and operating costs 
for each bauxite deposit, (b) capital investments and 
operating costs (or toll charges) for downstream processing 
by alumina refineries and aluminum smelters, and (c) 
transportation charges to ship bauxite and alumina. 

4. To perform an economic analysis of each operation to 
determine its average total production cost of aluminum over 
its producing life. 

5. To aggregate and illustrate graphically total potential 
primary aluminum production and the average total cost of 
each operation, including a 15-pct discounted cash flow rate 
of return (DCFROR) on all investments. 



ACKNOWLEDGMENTS 



The authors express their appreciation to Luke Baumgard- 
ner, Bureau of Mines bauxite commodity specialist, for his 



assistance in determining the bauxite properties and the 
associated resource tonnages included in this report. 



THE WORLD ALUMINUM INDUSTRY 



Of the approximately 89.9 million tons of bauxite produced 
in the world in 1980 (table 1), 46 pet was provided by 
Australia and Guinea. Guyana, Jamaica, and Suriname 
accounted for an additional 21 pet. In all, the 1 1 IBA member 
countries accounted for 74 pet of the world's bauxite output in 
1980. The United States imported 14.1 million tons of bauxite 
in 1980 (table 2), 70 pet from the Caribbean and eastern 
South America. 

World alumina production in 1980 amounted to almost 33 
million tons (table 3), with Australia and the United States 
accounting for 42.6 pet of total production. Although the 



^ A "greenfield" project is a new project, often in a remote area, which must 
be developed from the ground up, including all necessary infrastructure. 



United States produced 6.8 million tons of alumina in 1980, it 
also imported 4.4 million tons (table 4), of which 78 pet 
originated in Australia. The trend towards at-home alumina 
refining in bauxite-producing countries is a continuing 
structural change in the aluminum industry that began some 
20 years ago. To reduce shipping costs and to take 
advantage of lower quality bauxite resources, the aluminum 
companies began to build alumina refineries in the bauxite- 
producing countries; thus, they convert the bauxite to 
alumina and cut the shipping costs in half. The bauxite- 
producing countries have also pushed for more at-home 
alumina production because of the economic contribution 
provided by the value added from the further processing of 
bauxite into alumina. Overall, 1 ton of alumina is worth 
approximately seven times as much as 1 ton of bauxite 



Table 1. — World bauxite production* 

(Thousand tons) 

Country 1960 1970 1979" 1980° 

IBA member countries: 

Australia 70 9.093 27,583 27,584 

Dominican Republic 689 1 ,033 524 605 

Ghana 228 339 214 225 

Guinea 1,189 2,559 13,700 13,780 

Guyana 2,511 4,015 2,312 2,348 

Haiti 272 611 584 452 

Indonesia 395 1,191 1,052 1,224 

Jamaica 5,837 11,633 11,505 12,261 

Sierra Leone — 426 583 590 

Suriname 3,455 5.174 5,010 4,696 

Yugoslavia 1.025 2,033 3,012 3,138 

Total IBA countries 15.671 38.107 66.079 66,903 

Other countries: 

Brazil 121 484 2.388 3,970 

France 2,068 2,956 1,969 1,665 

Greece 884 2,207 2,915 2,950 

Hungary 1,189 1,959 2,976 3,020 

India 383 1,317 1,934 1,740 

Malaysia 459 1,103 387 920 

United States 2,030 2,049 1 ,821 1 ,559 

U.S.S.R.'^ 3,556 4,134 4,600 4,600 

Others 1,088 1,056 2,607 2,606 

Total other countries 11,778 17,265 21,597 23,030 

Grand total 27,449 55,372 87,676 89,933 

Percent IBA countries 57 69 75 , 74 

® Estimated. " Preliminary. — indicates or negligible tonnage in tne year 
shown. 

' Table includes data available through July 1, 1981. 

^ In addition to the bauxite reported in the body of the table, the U.S.S.R. 
also produces alunite ore and nepheline syenite concentrates as sources of 
aluminum. 



Table 3. — World alumina production* 

(Thousand tons) 

Country 1970 1979P 1980» 

IBA member countries: 

Australia 2,138 7,415 7,247 

Guinea 610 660 708 

Guyana 305 154 219 

Jamaica 1 ,689 2,074 2,478 

Suriname 998 1,325 1,316 

Yugoslavia 125 836 870 

Total IBA countries 5,865 12,467 13,010 

Other countries: 

United States 6,485 6,450 6,810 

U.S.S.R 1,814 2,600 2,700 

Japan 1,285 1,545 1,950 

Germany, Federal Republic of 758 1 ,352 1 ,400 

France 1,130 1,075 1,173 

Canada 1,105 824 1,138 

Italy 314 854 900 

Hungary 441 788 800 

China 254 750 750 

Brazil 119 449 540 

India 327 493 500 

Romania 210 500 500 

Greece 312 496 490 

Turkey — 140 140 

Czechoslovakia 73 100 100 

United Kingdom 107 88 90 

Taiwan 42 58 65 

Spain — — 58 

German Democratic Republic 54 41 41 

Grand total 20,695 31,067 32,983 

Percent IBA 28.3 40 39.4 

'Estimated. ''Preliminary. — indicates or negligiDie tonnage in the year 
shown. 
^ Table includes data available through July 1, 1981. 



Table 2. — U.S. imports off crude and dried bauxite* 

(Thousand tons) 

Country 1960 1970 1980° 

IBA member countries: 

Dominican Republic^ 642 896 565 

Guinea — — 4,112 

Guyana 335 312 585 

Haita 347 607 452 

Jamaica^ 4,242 7,384 6,146 

Sierra Leone — — 75 

Suriname 3,308 2,877 1,369 

Total IBA countries 8,874 12,076 13,304 

Other countries: 

Greece — 57 — 

Brazil — — 777 

aher 5 287 6 

Grand total 8,879 12,420 14,087 

Percent IBA 99.9 97^2 94.4 

* Estimated. — indicates or negligible tonnage in the year shown. 

' Includes bauxite imported to the U.S. Virgin Islands from foreign countries. 

^ Dry equivalent of exports to the United States. 



exported as raw ore. Whereas in 1960 only 10 pet of the total 
world production of alumina was from the lesser-developed- 
country (LDC) bauxite producers, this percentage has grown 
Steadily, to 34 pet in 1975 (14). 

Primary aluminum production in market economy coun- 
tries in 1980 was about 12,700,000 tons. As shown in table 5, 
the United States remained the largest aluminum producer in 
the world, producing 4,654,000 tons in 1980, which 
accounted for some 36.6 pet of the market economy 
countries' production that year. This share of world 
production will probably decline in the future because of the 
increasing cost of the electricity needed for aluminum 
smelting. Extremely energy intensive, the Hall-Heroult 
process requires 1 3,000 to 1 8,000 kWh of electricity per ton 
of primary aluminum produced. To produce 10.4 billion 
pounds of primary ingot, domestic aluminum smelters used 
some 78 billion kWh of electricity in 1 978, 1 pet of the total 
electricity U.S. industry consumed in that year (7, p. 24). 



Table 4. — U.S. imports off alumina* 

(Thousand tons) 
Country 1970 1978 1980° 

IBA member countries: 

Australia 1,075 2,879 3,408 

Guyana 34 30 17 

Jamaica 787 628 634 

Suriname 314 382 246 

Total IBA countries 2,210 3,919 4,305 

Other countries 107 48 56 

Grand total 2,317 3,967 4,361 

Percent IBA 95.3 987 98.7 

° Estimated. 

' Includes aluminum hydroxide; excludes shipments from the U.S. Virgin 
Islands. 



Some 35 pet of the total domestic aluminum smelting 
capacity is in the Pacific Northwest, which receives 
hydroelectric power from the Bonneville Power Authority 
(BPA). The existing power contracts with the BPA are to 
expire in the next few years; thus, the companies will have to 
renegotiate new long-term contracts with the BPA at much 
higher rates, with the aluminum producers experiencing an 
increase from a price level of 6.2 mills/kWh to a rate in the 
range of 15 to 21 mills. Moreover, an increase in population 
and industrial growth in the Northeastern United States 
provides further competition to the aluminum industry for 
energy. 

Utilities in a position to negotiate regular price reviews, like 
the Tennessee Valley Authority (TVA), are insisting on new 
prices reflecting costs of coal- or oil-fired power stations (14, 
p. 31). Increased fossil-fuel costs, environmental restrictions 
on smelters, and the current moratorium on nuclear energy 
construction affect other domestic aluminum-producing 
areas as well. Consequently, the industry has been reluctant 
to expand domestic primary production capacity, and 
companies have instead focused their attention on develop- 
ing "greenfield" projects overseas in such countries as 
Australia, Brazil, Cameroon, Ghana, and Indonesia. 



Table 5. — World primary aluminum production^ 

(Thousand tons) 

Country 1960 1970 1980= 

Market economy countries: 

United States 1 ,828 3,607 4,654 

Japan 133 733 1,092 

Canada 691 973 1,068 

Germany, Federal Republic of 169 309 731 

Norway 165 530 652 

France 238 381 432 

Spain 24 115 387 

United Kingdom 29 40 375 

Venezuela — 23 313 

Australia 12 204 304 

Italy 84 146 271 

Netherlands — 75 259 

Brazil 18 44 256 

India 18 161 185 

Yugoslavia 25 48 185 

Ghana — 113 170 

New Zealand — — 1 56 

Greece — 87 1 45 

Bahrain — — 1 26 

Egypt — — 120 

Argentina — — 119 

Austria 68 90 94 

Switzerland 40 92 86 

South Africa — — 83 

Sweden 16 66 82 

Iceland — 38 74 

Taiwan 8 27 64 

Suriname — 55 50 

Mexico — 34 44 

Cameroon 44 53 40 

Turkey — — 31 

Dubai — — 25 

Republic of Korea — 15 21 

Iran — — 10 

Market economy country total 3,610 8,059 12,704 

Central economy countries: 

U.S.S.R 676 1,100 1,788 

China 80 127 363 

Romania — 102 241 

Poland 26 99 91 

Hungary 50 66 74 

German Democratic Republic 40 59 65 

Czechoslovakia 40 31 38 

North Korea — — 10 

Central economy country total 912 1,584 2,670 

Grand total 4,522 9,643 15,374 

^ Estimated. — indicates or negligible tonnage in the year shown. 
^ Table includes data available tnrough May 25, 1981. 



The world aluminum industry has been described as an 
oligopoly made up of six multinational firms: Alcan Alunimum, 
Ltd., Aluminum Co. of America (Alcoa), Reynolds Metals Co., 
Kaiser Aluminum and Chemical Corp., Pechiney Ugine 
Kuhlmann (PUK), and Swiss Aluminum, Ltd. (Alusuisse). 
Fully integrated, these companies occupy strategic positions 
in the industry, from producing raw materials to marketing 
both metal and end products. About 35 pet of world 
production capacity for bauxite, 50 pet of world alumina 
capacity, and 40 pet of world aluminum capacity is under 
their control. Moreover, through a variety of consortia 
arrangements, one or more of these firms is associated with 
practically all new projects of international significance within 
the industry. 

In addition to these major international firms are some 50 
others whose somewhat restricted aluminum operations 
account for about one-fourth of world production capacity for 
bauxite, alumina, and aluminum metal. Most of these 
producers are nonintegrated, and some are owned by or 
associated with either governments or the six large 
international aluminum companies {20, p. 4). Some 19 pet of 
world aluminum production capacity is controlled by com- 
munist governments, and about 22 pet is controlled by 
governments of other countries. 

Of the 12 domestic firms producing primary aluminum 
metal in the United States in 1979, 7 owned and imported 



raw materials from their bauxite and/or alumina facilities in 
the Caribbean area. South America, Guinea, or Australia. 

The six large international aluminum companies dominate 
the market for aluminum metal and metal goods. Producers' 
prices have shown a high degree of correspondence and 
stability. On the growing free market, metal from noninte- 
grated producers is offered on the London Metal Exchange 
(LME) on both spot and forward bases. The prices on the 
LME, tenuously tied to the producers' prices, more commonly 
tend to fluctuate in consonance with those of the LME 
quotations for other nonferrous metals {19, p. 115). 
Throughout the 1 960's, aluminum prices stayed remarkably 
stable, both in current dollar and in real terms. Since 1974, 
worldwide inflation, increased costs for bauxite from IBA 
member countries, and the rising costs of energy have been 
factors in causing the aluminum price to increase approx- 
imately threefold as of August 1980. 



IMPORTANCE OF SECONDARY (SCRAP) 
RECOVERY TO THE INDUSTRY 



Recovery of purchased scrap contributes some 25 pet of 
the total domestic supply of aluminum. Scrap is divided into 
two main categories, new scrap and old scrap. New scrap is 
generated in manufacturing primary aluminum, semifabri- 
cated aluminum mill products, or finished industrial and 
consumer products. New scrap includes solids, such as new 
casting scrap; clippings or cuttings of new sheet, rod, wire, 
and cable; borings and turnings from the machining of 
aluminum parts; and residues, drosses, skimmings, spillings, 
sweepings, and foil {20, p. 7). Old scrap, from discarded, 
used, and worn-out products, includes aluminum engine or 
body parts from junked cars, used aluminum cans and 
utensils, and old wire and cable. The proportion of total 
domestic metal consumption met by the recovery of old scrap 
amounted to about 10 pet in 1979 {12). 



DEMAND FOR ALUMINUM 



Between 1975 and 2000, domestic primary aluminum 
demand is expected to increase threefold, with an average 
annual rate of growth estimated from 4 pet {13) to 5.3 pet 
(20), or slightly lower than the estimated rate of growth for the 
world demand as a whole over the same period. The United 
States will likely remain the world's largest consumer and 
one of the world's largest producers of aluminum during this 
period. 

U.S. dependence on foreign primary aluminum production 
is growing. One estimate {25, p. 33) forecasts that domestic 
bauxite production will satisfy a decreasing share of demand, 
that alumina refining will drop from over a 70-pet share in the 
U.S. market in 1977 to under 40 pet by the year 2000, and 
that domestic aluminum smelting will drop from over 90 to 80 
pet during the same period. At the same time, user segments 
of the domestic market will continue to grow. In 1979, the 
major domestic markets, in descending order of market 
share, were building and construction, transportation, the 
electrical sector, consumer durables, and machinery and 
equipment. In housing, the demand is growing for roofing, 
window frames, aluminum siding, and insulation. In durables, 
more aluminum is being used to improve efficiency and to 
increase service life. In the electrical sector, aluminum is 
used mainly for overhead power transmission lines. Alumi- 
num alloys are becoming more attractive as a substitute for 
steel in the automotive industry because of the weight factor, 
and aluminum is becoming more popular in packaging 
because much of it is recyclable. 



THE IMPACT OF OPEC AND THE 
FORMATION OF THE IBA 



The International Bauxite Association (IBA) was formally 
established at a meeting in Conakry, Guinea, in March 1974. 
Seven bauxite-producing nations became the original mem- 
bers; Australia, Guinea, Guyana, Jamaica, Sierra Leone, 
Surinam and Yugoslavia. The Dominican Republic, Ghana, 
Haiti, and Indonesia soon joined, for a current total 
membership of 1 1 nations which cumulatively produce 
approximately three-quarters of the total world bauxite 
output. 

The objectives of the IBA are stated in the Final Act of the 
International Conference of Bauxite Producing Countries 
(also referred to as the Conakry accord), consisting of 28 
articles expressing the objectives and ground rules for the 
organization. The basic objectives are (17, p. 166): 

1 . To promote the orderly and rational development of the 
bauxite industry. 

2. To secure for member countries fair and reasonable 
returns from the exploitation, processing, and marketing of 
bauxite and its products for the economic and social 
development of their peoples, bearing in mind the recognized 
interests of consumers. 

3. Generally, to safeguard the interests of member 
countries in relation to the bauxite industry. 

Interest in developing a producer association for bauxite 
had existed for several years before 1974 because the 
bauxite-producing nations were dissatisfied with the fiscal 
revenues generated by their respective bauxite industries. 
Guyana took the extreme move of fully nationalizing the 
Demerara Bauxite Co. from Alcan Aluminum, Ltd., in 1971. 



The Guyana Government, wishing to use its hydroelectric 
potential to integrate into smelting primary aluminum, 
believed that nationalization was the means to achieve its (as 
yet unfulfilled) objective. Surina's net revenues from the 
industry had not improved since the 1950's, even though the 
country had a large alumina refinery and the only aluminum 
smelter in the Caribbean. Jamaica, the leading Caribbean 
producer, was frustrated by the lack of significant revenues 
from its large alumina output and anticipated no further 
expansion of its industry by the aluminum companies. Taxes 
paid to the Jamaican Government amounted to only $1 .77 
per long dry ton of bauxite output in 1973 (4, p. 121). 

The final inducement for forming a producer association 
was supplied by the Organization of Petroleum Exporting 
Countries (OPEC) in the fall of 1973. From an earlier level of 
$1.80 per barrel, the price of OPEC crude oil was raised to 
$2.59 in early 1972, doubled to $5.11 in October 1973, and 
doubled again in December to $1 1 .65 — a six-fold increase 
{17, p. 83). Jamaica faced an oil-import bill that tripled from 
$55 million in 1972 to $165 million in 1974. Jamaica's 
international monetary reserves were reduced to a level 
equal to only 1 month's worth of its imports. In response to 
this OPEC-induced economic crisis, Jamaica unilaterally 
announced in January 1974 that it would seek to renegotiate 
the existing bauxite contracts with the aluminum companies, 
since the "doctrine of changed circumstances" was applic- 
able because of higher oil prices. Once the aluminum 
companies acceded to Jamaican demands for a bauxite levy, 
the other Caribbean bauxite-producing nations followed suit 
by announcing their own versions of a bauxite levy. When the 
IBA was founded in 1974, all its members except Australia 
adopted some form of a bauxite levy or equity participation in 
their respective industries. 



IDENTIFICATION AND SELECTION OF BAUXITE DEPOSITS 



The only commercial source of primary aluminum in the 
market economy countries is bauxite ore. Because nonbauxi- 
tic sources of aluminum will not become economically 
competitive with bauxite in the foreseeable future, this study 
discusses only the availability of alumimun from bauxite ore. 
Information on the domestic availability of alumina from 
nonbauxitic sources is detailed elsewhere (18). 

For the bauxite deposits analyzed in this report, tonnage 
estimates were made at the demonstrated resource level 
according to the mineral resource classification system (fig. 
2) developed jointly by the U.S. Geological Survey and the 






lOENTtriED RESOURCES 



Dtinonitfoltil 



Meolurcd Indicolcd 



UNDISCOVERED RESOURCES 



bgt.CQl [ 



+ 



+ 






entlonol ond lo>-grode 



Figure 2. — Reserve-base and inferred reserve- 
base classification categories. 



Bureau of Mines (24). The demonstrated resource category 
includes measured plus indicated tonnages. 

Selection of deposits for this study was limited to 
significant, known deposits that have demonstrated re- 
sources. Most reserve and resource tonnage and grade 
calculations presented herein have been computed partly 
from specific measurements, samples, or production data 
and partly from estimations made on geologic evidence. 

The world bauxite reserve base, as estimated by the 
Bureau of Mines, amounts to 22.4 billion tons of bauxite ore, 
of which about 21.2 billion tons are in market economy 
countries. Based on data from the Bureau of Mines, U.S. 
Geological Survey, and IBA, the authors of this report 
estimate that world bauxite resources at the identified 
resource level (which includes measured, indicated, and 
inferred reserve categories) are 33.4 billion tons. Of that 
amount, 31.9 billion tons are in the market economy 
countries. In addition, the U.S. Geological Survey and the 
Bureau of Mines estimate that total world bauxite resources 
(identified plus subeconomic and undiscovered resources) 
amount to 40 to 55 billion tons (16). The IBA (11) reports a 
more optimistic total world resource figure of 103.4 billion 
tons. Regardless of the source of data, worldwide bauxite 
resources are extensive and will likely increase further as a 
result of exploration activities. 

This study is based upon the availability of aluminum from 
91 bauxite properties in 22 countries, which have demons- 
trated bauxite resources of 20.2 billion tons, accounting for 
almost 96 pet of the reserve base for market economy 
countries. An additional 48 bauxite properties also investi- 
gated for this study were not evaluated since many of them 
contain only inferred resources, were relatively small and/or 



low grade, contained only chemical or refractory-grade but not included in this study is shown in table A-4. Estimates 

bauxite (which could be used to produce cell-grade alumina, of total bauxite resources in market economy countries (at 

but probably would not be because of its higher grade and the demonstrated and identified resource levels) are shown 

therefore higher value), or were in countries where reliable in table 6, and information on the individual properties 

cost data are unobtainable. The list of deposits investigated included in the analysis is presented in table 7. 



Table 6. — Bauxite resource information for market economy countries 



Country 


Number of deposits 


Demonstrated 


in situ materiaP 


Identified in situ material^ 




evaluated 


Thousand tons 


Percent of total 


Thousand tons 


Percent of total 


Caribbean: 












Dominican Rep 


1 


15,600 


0.08 


45,000 


0.14 


Haiti 


1 


14,000 


.07 


14,000 


.04 


Jamaica 


15 


2,000,000 


9.90 


2,000,000 


6.27 


Total 


17 


2,029,600 


10.05 


2,059,400 


6.45 


United States 


3 


38,000 


.19 


40,000 


,13 






South and Central 












America: 












Brazil 


7 


2,270,300 


11.22 


4,070,000 


12.75 


Columbia 


— 


— 


— 


83,000 


.26 


Costa Rica 


1 


78,500 


.39 


150,000 


.47 


French Guiana — 


1 


42,000 


.21 


170,000 


.53 


Guyana 


11 


519,000 


2.56 


1,016,000 


3.18 


Suriname 


4 


577,900 


2.86 


600,000 


1.89 


Venezuela 


1 


236,000 


1.16 


500,000 


1.57 


Total 


25 


3,723,700 


18.40 


6,589,000 


20.65 


Africa: 












Cameroon 


1 


800,000 


3.95 


1,500,000 


4.70 , 


Ghana 


3 


558,100 


2.76 


780,000 


2.44 : 


Guinea 


6 


5,625,000 


27.80 


8,200,000 


25.69 ' 


Malawi 


1 


28,800 


.14 


70,000 


.22 


Mali 


— 


— 


— 


880,000 


2.76 


Sierra Leone 


2 


161,400 


.80 


161,400 


.51 


South Africa 


_ 


— 


— 


20,000 


.06 






Total 


13 


7,173,300 


35.45 


11,611,400 


36.38 


Europe: 












France 


6 


43,800 


.22 


43,800 


.14 


Greece 


4 


600,000 


2.96 


700,000 


2.19 ' 


Turkey 


1 


16,800 


.08 


30,000 


.09 


Total 


11 


660,600 


3.26 


773,800 


2.42 


Asia: 












India 


8 


1,181,000 


5.83 


1,900,000 


5.95 


Indonesia 


2 


805,000 


3.98 


805,000 


2.52 


Malaysia 


- 


— 


— 


15,000 


.05 


Philippines 




— 


— 


60,000 


.19 


Total 


10 


1 ,986,000 


9.81 


2,780,000 


8,71 


Oceania: 












Australia 


10 


4,574,700 


22.60 


8,000,000 


25.07 


Solomon Islands. , 


2 


50,300 


.25 


60,000 


.19 


Total 


12 


4,625,000 


22.85 


8,060,000 


25.26 


Grand total 


91 


20,236,200 


100.00 


31,913,200 


100.00 



— Indicates or negligible tonnage in the year shown. 

' Excludes Yugoslavia. Demonstrated tonnage is from the 91 mines and deposits evaluated for this study. 

^ Identified resources are measured plus indicated plus inferred resources. The identified tonnages are country totals, not just from the deposits evaluated. 

Note. — Resource figures, by country, have been rounded to the nearest hundred thousand. 



Table 7. — Bauxite property information, January 1980 



Location and property name 



Ownership 



Status' Type^ 



Stripping ratio" 
(waste to ore) 



Type of ore 



Arkansas: 

Alcoa Bauxite Alcoa 



Quapaw bauxite mine American Cyanamid . 

Reynolds surface mine Reynolds Metals . . . . 



Australia: 

Aurui^un Billiton-Pectiiney 

Cape Bougainville Alumax-Mitsui-Nippon Steel 



Chittering (Muchea) Pacminex-Hanwright-Metals H/liniere 

Gove Swiss Aluminum Australia 

Ltd. -Gove Alumina Ltd. 
Huntly-Del Park Alcoa Australia 



Jarrahdale do 

Mitchell Plateau Mitchell-Alumax-Sumitomo 

Mount William (Wagerup) Alcoa of Australia 

Weipa-Andoom Kaiser-Rio Tinto-public 

Worsley (Mount Saddleback) . . Reynolds-Worsley Alumina Pty. Ltd. 

Brazil: 

Almeirim-Jutai Companhia Vale do Rio Doce 

Ouro Preto Alcan 



Paragominas MIneracao Vera Cruz S.A 

Poco de Caldas-Alcominas .... Alcoa-Hanna-State Minas Gerais. . . 

Pocos de Caldas Companhia Brasileira do Alum 

Trombetas MIneracao Rio do Norte 

Trombetas-Alcoa Alcoa-Shell 

British Pacific Islands: 

Rennell Island Mitsui Mining and Smelting Co 

Wagina Island Pacific Aluminum-CRA Exploration. 

Cameroon: Minim Martap Pechiney-BRGM-VAG 

Costa Rica: San Isidro del General . Costa Rican Government 



Dominican Republic: 

Cabo Rojo Alcoa 



France: 

Blanquette-Combecave Bauxites et Alumines de Provence , 

Canonnettes Aluminum Pechlney 

La Rouquette-Mont. Plaisir do 



Mazaugues (Var) Aluminum Pechiney 

Peygros (Var) do . 

St. Julien-Tourves Alusuisse 



French Guiana: Kaw Mountains Cle. Minidre de Guyane. . . 

Ghana: 

Awctso Ghana Bauxite Co.-Kaiser. 



Kibi (Atewa) Kaiser and Ghana Government . 

Nyinaihin Ghana Government 



Greece: 

Eleusls Eleusis Bauxite Mining Co 

Helikon Greek Helikon Bauxites Co 

Itea Eleusis Bauxite-Skalistiri 

Parnasse Bauxite Parnasse Mining Co. . . . 

Guinea: 

Aye-Koye Guinea Government 

Oabola Guinea Government-Bauxite de 

Dabola. 

Fria Friguia 

Kindia Guinea Government 



Sangaredi Haico Inc.-Guinea Government 

Tougue Guinea Government-Alusulsse 

Estimated. NAp — Not applicable. 'P — producer; N — nonproducer. 



P 


S 


6.1:1 


P 


S 


2.6:1 


P 


S 


8:1 


N 
N 


S 
S 


0.1:1 to 1:1 
0.13:1 


N 


S 


0.33:1 


P 


S 


0.29:1 


P 


S 


0.13:1 


P 


S 


0.13:1 


N 


S 


0.13:1 


N 


S 


0.13:1 


P 


S 


0.31:1 


N 


S 


0.33:1 


N 
P 


S 
S 


3:1 
0.2:1 


N 
P 
P 
P 

N 


S 
S 
S 
S 
S 


5:1 to 7:1 

0.1:1 

0.1:1 

1:1 

1:1 


N 
N 
N 
N 


S 
S 
S 
S 


0.4:1 
0.1:1 

0.33:1 to 1:1 
0.2:1 



u 
u 
u 

u 
u 
u 

s 

s 

s 
s 

u 
u 
u 
s 

s 
s 

s 

s 

P s 

N S 

^S — surface; 



0:1 

NAp 
NAp 
NAp 

NAp 
NAp 
NAp 

0.1:1 

1:1 

0.63:1 
0.1:1 



NAp 
NAp 
NAp 
3:1 

0:1 
0:1 

0:1 
0:1 

0:1 



0:1 
U — underground. 



Gibbsite, some boehmite, 50 pet AI203, 13 pet 

silica. 
Gibbsite, some cliachite and kaolinite, 43 pet AI2O3 

(wet) 
Gibbsite, some boehmite, 50 pet AljOs, 13 pet 

silica. 

Mixed, 53 pet AI2O3, 6 to 8 pet silica. 
Gibbsite, some boehmite, 36 pet AI2O3, 1 .9 pet 

silica. 
Gibbsite, some boehmite, 30 to 35 pet AI2O3, 1 to 2 

pet reactive silica. 
Gibbsite, some boehmite, 50.4 pet AI2O3, 2 to 6.5 

pet silica. 
Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 

pet silica, 1 to 2 pet reactive silica. 
Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 

pet silica, 2 to 3 pet reactive silica. 
Gibbsite, some boehmite, 47 pet AI2O3, 2 to 3 pet 

silica. 
Gibbsite, some boehmite, 32.5 pet AI2O3, 15 to 22 

pet silica, 1 to 2 pet reactive silica. 
Mixed, mainly gibbsite, 48 to 56 pet AI2O3, 4.5 to 9 

pet silica. 
Pisolitic gibbsite, 32.2 pet AI2O3, 15 to 22 pet silica, 

1 to 2 pet reactive silica. 

Gibbsite, 51.6 to 57.5 pet AI2O3, low silica. 
Gibbsite, 37 pet AI2O3 in situ, 47 pet washed, 2.23 

pet reactive silica. 
Gibbsite, 53 to 58 pet AI2O3, 3 to 7 pet silica. 
Gibbsite, 46 to 54 pet AI2O3, 5 to 6 pet silica. 
Gibbsite, 46 to 54 pet AI2O3, 5 to 6 pet silica. 
Gibbsite, 50 pet AI2O3, 4 pet reactive silica. 
Gibbsite, 50 pet AI2O3, 4 pet reactive silica. 

Gibbsite, 48 pet AI2O3, low silica. 

Gibbsite 47.1 pet AI2O3, low silica. 

Gibbsite, 42 pet AI2O3, 3 pet silica. 

Gibbsite, some boehmite, 33.8 pet available AI2O3, 

7.5 pet reactive silica. 

Gibbsite and boehmite (5:1), 42 to 50 pet AI2O3, 

1.6 to 10 pet silica. 

Boehmite and diaspore, 54 pet AI2O3. 

Boehmite and diaspore, 50 pet AljOs, 6.8 pet silica. 

Boehmite and diaspore, 55.5 pet AI2O3, 4.3 pet 

silica. 
Boehmite and diaspore, 54 pet AI203, 3.5 pet silica. 
Boehmite and diaspore, 50 pet AI2O3, 7 pet silica. 
Boehmite and diaspore, 48.5 to 52.2 pet AI2O3, 

15.7 to 23 pet silica. 
Gibbsite, 42 pet AI2O3, 2 pet silica. 

Gibbsite, some boehmite, 48.7 pet AI2O3, 1 .7 pet 

silica. 
Gibbsite, 44 pet AI2O3, 3 pet silica. 
Gibbsite and boehmite (5:1), 40 pet AI2O3, 3.2 pet 

silica. 

Boehmite, 51 pet AI2O3, 0.7 to 2 pet silica. 
Boehmite and diaspore, 60 pet AI2O3, 4 pet silica. 
Boehmite and diaspore, 60 pet AI2O3, 4 pet silica. 
Boehmite and diaspore, 57.5 pet AI2O3, 2 pet silica. 

Gibbsite, 49 pet AI2O3. 

Gibbsite and boehmite (9:1), 45 pet AI2O3, 1.33 pet 

silica. 
Gibbsite, 48 pet AI2O3, 2.5 pet silica. 
Gibbsite, some boehmite, 48 pet AI2O3, 1 to 3 pet 

silica. 
Gibbsite, some boehmite, 48 to 60 pet AI2O3, about 

4 pet silica. 
Gibbsite, 43 pet AI2O3, 3.8 pet silica. 



Table 7. — Bauxite property information, January 1980 — Continued 



Location and property name 



Ownership 



Status^ Type^ Stripping ratio* 
(waste to ore) 



Type of ore 



Guyana: 

Arrowcane East Guyana Government 

Arrowcane South do . . 

Coomacka do . . 

East Mombaka do. . 

East Montgomery do . . 

Ituni District do . . 

Kara-Kara do . . 



Manaka do . 

West Bank #3 do , 

West Mombaka do . 

Yararibo do . 



Haiti: Miragoane Reynolds Haitian Mines Inc. 

India: 

Amarkantak Bharat Aluminum Co. Ltd. . . 

Anantaglrl do 



Bagru Hills Indalco-Alcan 

Chandgad Indaico 



Chintaplee Bharat Aluminum Co. Ltd . . 

Gandhamardan do 

Lohardaga (Hindaico) Hindustan Aluminum Co . . . 

Panchpatmali-Orissa Bharat Aluminum Co. Ltd . . 

Indonesia: 

Bintan Island P.N. Aneka Tambang 

Singakawang do 

Jamaica: 

Alpart Kaiser-Reynolds-Anaconda . 

Breadnut Valley Alcoa-Jamaica Government 

Cambridge Jamaica Government 

Ewarton Alcan-Jamaica Government 



Kirkvine do 

Lydford Reynolds-Jamaica Government . 

Maggotty Jamaica Government 

New Market East do 

Samaico do 

Schwallenburgh West do 

Spanish Town West do 

Trelawny do 



Trelawny Central do 

Water Valley Kaiser Jamaica Bauxite Co. 

Williamsfield East Jamaica Government 



Malawi: Mulanje Mountain Malawi Government 

Sierra Leone: 

Moyamba Sierra Leone 

Government-Alusuisse. 

Port Loko do 

Suriname: 

Bakhuis Mountains N.V. Grassaico (Government) 

Moengo Suraico 

Onverdacht Billiton N.V 

Suraico (Leiydorp) Suriname Aluminum Co 

Turkey: Seydisehir Etibank 

Venezuela: Los Pijiguaos Industrie Venezolana de Aluminio. 



9:1 

9:1 

9:1 

9:1 

9:1 

8:1 

9:1 

9:1 

9:1 

9:1 

9:1 

0:1 

4:1 
0:1 

1.1:1 
1.5:1 

0.11:1 
NA 
3:1 
0.4:1 

0.1:1 
0.1:1 

0.125:1 

0:1 

0.125:1 
1:1 

0:1 
0:1 



0.1 
0.1 
0.4 
0:1 
0:1 
0:1 

0.1:1 
0.1:1 
0:1 

0:1 

0:1 

0.5:1 



0.2:1 

1:1 

1.7:1 

NA 

1:1 to 3:1 

0.05:1 



Gibbsite, some boehmite, 59 pot AI2O3, 1 to 10 pet 

silica. 
Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet 

silica. 
Gibbsite, some boehmite, 59 pet AljOs, 1 to 10 pet 

silica. 
Gibbsite, some boehmite, 59 pet AljOg, 8.3 pet 

silica. 
Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet 

silica. 
Gibbsite, boehmite (20:1), 50 to 63 pet AI2O3, 8.3 

pet silica. 
Gibbsite, some boehmite, 59 pet AI2O3, 1 to 10 pet 

silica. 
Gibbsite, some boehmite, 59 pet AI2O3, 8.3 pet 

silica. 
Gibbsite, some boehmite, 59 pet AljOs, 1 to 10 pet 

silica. 
Gibbsite, some boehmite, 59 pet AlaOs, 8.3 pet 

silica. 
Gibbsite, some boehmite, 59 pet AI2O3, 1 to 1 pet 

silica. 
Mixed, 50 pet AI2O3, 3.4 to 4.7 pet silica. 

Mixed, 37 to 54 pet AI2O3, 2 to 7 pet silica. 
Gibbsite, some hematite, 48 pet AI2O3, 2.5 pet 

silica. 
Gibbsite, 53.2 pet AI2O3, 3.3 pet silica. 
Gibbsite and hematite, 48.6 pet AI2O3, 3.2 pet 

silica. 
Gibbsite, 46 pet AI2O3, 2 pet silica. 
Gibbsite, 47 pet AI2O3, 2.6 pet silica. 
Gibbsite, some boehmite, 45 pet AI2O3, 3 pet silica. 
Gibbsite, 42 to 56 pet AI2O3, 1 to 3 silica. 

Gibbsite, 45 to 50 pet AI2O3, 8 to 13 pet silica. 
Gibbsite, 54 pet AI2O3, 5 pet silica (washed). 

Gibbsite, some boehmite, 42 to 50 pet AI2O3, 1 to 

20 pet silica. 
Gibbsite, some boehmite, 43.5 pet AI2O3, 1 .5 pet 

silica. 
Gibbsite, some boehmite, 43 pet AI2O3. 
Gibbsite, some boehmite, 43 pet AI2O3, 1 .8 pet 

silica. 
Gibbsite, some boehmite, 45 pet AI2O3, 1 pet silica. 
Gibbsite, some boehmite, 42.5 pet AI2O3, 1 pet 

silica. 
Gibbsite, some boehmite, 43 pet AI2O3. 
Gibbsite, some boehmite, 42 pet AI2O3. 
Gibbsite, some boehmite, 44 pet AI2O3. 
Gibbsite, some boehmite, 42 pet AI203. 
Gibbsite, some boehmite, 42 pet AI2O3. 
Gibbsite, some boehmite, 42 pet AI2O3, less than 3 

pet silica. 
Gibbsite, some boehmite, 43 pet AI2O3. 
Gibbsite, some boehmite, 45 pet AI2O3. 
Gibbsite, some boehmite, 43 pet AI2O3, less than 3 

pet silica. 
Gibbsite, 43.9 pet AI2O3, 2.2 pet reactive silica. 

Gibbsite, 47 pet AI2O3, 4.5 pet silica. 

Gibbsite, 49 pet AI2O3, 4 pet silica. 

Gibbsite, 48.4 pet AI2O3, 3.1 pet silica. 
Gibbsite, 54 pet Ai203. 

Gibbsite, 52 pet AI2O3, 4.5 pet reactive silica. 
NA. 

Boehmite, 56 to 59 pet AI2O3, 7 to 8 pet silica. 
Gibbsite, 49 pet AI2O3, 9.3 pet silica, (2.2 pet 
reactive silica. 



"Estimated. NA — Not available. 'P — producer; N — nonproducer. ^S — surface; U — underground. 



10 



BAUXITE MINING AND PROCESSING 



GENERAL 

Bauxite, the principal ore of aluminum, is composed of 
aluminum hydroxide minerals with impurities of free silica, 
clay, silt, and iron hydroxides (23). The types of bauxite are 
(1) trihydrate, consisting mainly of gibbsite, AI203-3H20; (2) 
monohydrate, consisting mainly of boehmite, AlO (OH), or 
diaspore, AI2O3H2O; and (3) mixed bauxite, consisting of 
both gibbsite and boehmite (16). Bauxite is believed to be 
formed as a residual soil in humid, tropical, or subtropical 
regions with good drainage. Extreme weathering conditions 
common to tropical climates decompose the iron and 
aluminum silicates, and leaching through downward percola- 
tion of water removes the silica and many other elements. 
Bauxite deposits typically assay 28 to 55 pet AI2O3. The 
aluminum industry consumes nearly 90 pet of the bauxite 
mined; the remainder is used as abrasives, chemicals, 
refractories, and miscellaneous minor products. 

Although many technological improvements have been 
made in producing aluminum from bauxite, the basic 
processes are unchanged since the metal first became 
available in commercial quantities over 90 years ago. These 
processes consist mainly of surface mining of bauxite, 
followed by hydrometallurgical processing to produce alumi- 
na (99.5 pet AI2O3), and then reducing the alumina to 
aluminum metal by fused-salt electrolysis in a molten bath of 
fluoride salts (20, p. 1). Generally, for each 4.5 tons of 
bauxite fed into the alumina refinery, 2 tons of alumina is 
extracted, from which about 1 ton of aluminum is produced. 



MINING 

Bauxite ore is mined mostly by open pit methods. This 
entails stripping away the overburden, which can subse- 
quently be replaced to restore the land surface after mining, 
and then the actual mining of the ore. In Arkansas, where as 
much as 13 ft of overburden must be removed for every foot 
of bauxite ore exposed, draglines, scrapers, shovels, and 
trucks are used in the stripping operations. In Jamaica, 
because the bauxite deposits lie very close to the surface, 
the overburden of vegetation and topsoil is easily removed. 
The ore is mined with shovels, draglines, and scrapers; 
blasting is not usually necessary. The ore is then transported 
by truck, rail, or aerial tram to the alumina refinery or port. 
Deposits in Australia and Guinea also lie very close to the 
surface, with very little stripping of overburden required; 
however, the bauxite in some of these deposits requires 
blasting to loosen the ore. Underground mining, by 
room-and-pillar methods, accounts for most of the bauxite 
production from deposits in France and other European 
countries. 

In their crude state, bauxites may contain from 10 to 25 pet 
free moisture. If the bauxite is to be transported over a long 
distance to the alumina refinery, most of this moisture is 
usually removed by drying at the mill, usually located at the 
mine site or at the port. Apart from crushing, drying is often 
the only processing applied to a metallurgical-grade bauxite 
before it reaches the alumina plant. Ores of different 
composition are often blended before milling to ensure as 
uniform a feed as possible and thus enfiance alumina 
recovery from the refinery. 



BAYER PROCESS FOR ALUMINA 
PRODUCTION FROM BAUXITE 

The Bayer process is the only commercial-scale method of 
converting metallurgical-grade bauxite to alumina. In the 
classic Bayer process, aluminum and other soluble elements 



in bauxite are dissolved at elevated temperatures and 
pressures in a strong alkali solution, generally NaOH, to form 
sodium aluminate (NaAI02). After separation of the "red 
mud" tails, the sodium aluminate solution is cooled and 
seeded, and aluminum trihydrate is precipitated in a 
controlled form. The trihydrate is dewatered and calcined to 
the anhydrous crystalline form, alumina. 

Depending on the mineral content of the ore, variations 
occur in the digestion temperature, pressure, and caustic 
concentration. In addition, higher silica ores (greater than 8 
pet Si02) require additional steps, known as the lime-soda- 
sinter process, to recover alumina and soda lost by 
combination with silica. Addition of the lime-soda-sinter steps 
to a Bayer process for high-silica ores is known as the 
Combination process, processing trihydrate ore is known as 
the American Bayer process, and processing monohydrate 
ore is known as the European Bayer process. Trihydrate ores 
containing up to 25 pet monohydrate recently have been 
processed by a method known as the Modified Bayer 
process. 

All variations of the Bayer process include caustic leaching 
and precipitation. Ore is typically wet-ground in a 40-pet- 
solids (by weight) solution to minus 20 to minus 28 mesh. 
The grinding takes place in a caustic medium. The ore is then 
placed into a digestor where steam is introduced and 
leaching occurs. Easily leached, trihydrate ores require a 
temperature in the range of 1 20° to 1 50° C, 30 to 1 00 psi, and 
a caustic concentration of 130 to 190 g Na2C03 per liter. 
Monohydrate ores are leached at higher temperatures (175° 
to 250° C), higher pressures of 300 to 500 psi, and a greater 
caustic concentration of 250 to 400 g Na2C03 per liter. 
Trihydrate ores containing up to 25 pet monohydrate are 
leached at 240° to 250° C, 525 psi, and 240 g NaaCOg per 
liter. 

After digestion, thickeners and filters separate the un- 
leached material containing the iron and nonreactive silica 
impurities (red mud) from the leach solution (green liquor). 
Starch is often added as a flocculating agent during this 
separation. The leach solution is cooled in precipitators for 34 
to 36 hr. After precipitation, the coarse alumina is separated 
from the fines and the spent liquor. The coarse alumina is 
calcined (in the United States) at 950° to 1 ,050° C and then 
stored for shipment to an aluminum smelter. The fines are 
returned to the precipitators, where they act as seed for the 
next batch. The spent liquor is returned to the digestor after 
evaporation of some of the excess water. 

Typical recoveries of aluminum in producing alumina 
from bauxite ores are 90 to 96 pet for the American Bayer 
process and 80 to 85 pet for the Modified Bayer process or 
the Combination process. Loss of aluminum is due principally 
to washing steps and silica-alumina reactions. The percent of 
alumina lost to silica is roughly equal to the weight-percent of 
reactive silica present in the ore. Miscellaneous losses 
account for 3 to 5 pet. 

For high-silica ores (above 8 pet silica content), enough 
aluminum is lost to justify the addition of the lime-soda-sinter 
process. In this process, the red mud tails from the Bayer 
process are combined with soda ash and limestone and 
sintered at 1,150° to 1,260° C. This sinter is then ground in 
the presence of water, which leaches the alumina from the 
sinter. The leach solution is separated from the remaining 
sinter (brown mud) and returned to the digestor of the Bayer 
process. The brown mud is discarded. 



THE HALL-HEROULT PROCESS {12) 

Primary aluminum is produced by the electrolysis of 
alumina in a molten bath of natural or synthetic cryolite 
(NasAIFe), which serves as an electrolyte and a solvent for 



11 



the alumina. The reduction cells or pots containing the bath 
are approximately 1 to 1 5 ft wide, 20 to 40 ft long, and about 
3 to 4 ft deep, lined with carbon, and connected in electrical 
series of 1 00 to 240 cells to form a potline. From 800 to 3,000 
lb of aluminum is produced per day in each pot. The carbon 
lining which serves as the cathode usually must be replaced 
every 3 to 4 years. Compounds of aluminum, fluorine, and 
sodium absorbed in the used pot linings are recovered and 
recycled, as is the carbon. 

Cryolite and aluminum flouride are added to the electrolyte 
to maintain the desirable ratio of sodium and aluminum 
fluoride and to replace fluorine lost from the cell in pot linings 
or through volatization. The melting point of the bath is 
lowered by the addition of small quantities of fluorspar or, in 
some instances, lithium compounds. The carbon anode, 
which is consumed during the operation, is replaced by the 
Soderberg continuous method or by the prebaked method. 

The molten bath or electrolyte may be as deep as 1 4 in, but 
the anode is usually only 2 in from the pad of molten 
aluminum. The resistance of the bath is sufficient to maintain 
an optimum operating temperature of 950° to 980° C. At this 
temperature, the maximum alumina content of the bath 
ranges from 3 to 1 pet. 

Every 1 or 2 days the molten aluminum is removed from 



the bottom of the cell by a vacuum-siphon technique. 
Thermally insulated cast iron pots with airtight lids and 
downward-sloping spouts are used to withdraw the molten 
metal. The pots are evacuated, and the molten metal is 
sucked into the cast iron pot. The molten metal, blended in a 
holding furnace with other batches, may be fluxed, alloyed, 
and cast into various solid forms, or transported molten to 
fabricating plants as far as 300 miles away. 

The cells utilize direct current ranging from 65,000 to 
150,000 amp; most plants have 80,000- to 100,000-amp 
cells. Anode current densities range from 600 to 800 amp/ft^ 
The voltage drop across a single cell is 4.5 to 5.0 v; across a 
potline, it may be as high as 1 ,000 v. 

Current efficiency ranges from 85 to 90 pet. Losses are 
principally caused by physical losses of metal through 
spillage and vaporization from the bath and by reoxidation of 
aluminum. Because of electrical resistance, the voltage 
efficiency is only 40 pet, with heat being lost by radiation and 
in the exhaust gases, in tapped metal, and in electrodes 
removed from the cell. Consequently, the overall energy 
efficiency is only about 35 pet. A further and more detailed 
description of the Bayer and Hall-Heroult processes appear 
elsewhere {12). 



COSTS OF ALUMINUM PRODUCTION 



Capital expenditures were calculated for exploration, 
acquisition, development, and mine plant and equipment; 
and for constructing and equipping the crushing, washing, 
and drying facilities. Capital expenditures for existing or new 
"greenfield" alumina refineries and aluminum smelters were 
also calculated for nonprodueers. The capital expenditures 
for the different mining and processing facilities include the 
costs of mobile and stationary equipment, construction, 
engineering, infrastructure (facilities and utilities), and 
working capital. The broad infrastructure category includes 
the costs of access and haulage facilities, water facilities, 
power supply, and personnel accommodations. Working 
capital is a revolving cash fund required for such operating 
expenses as labor, supplies, taxes, and insurance. 

The total operating cost of a project is a combination of 
direct and indirect costs. Direct operating costs include 
materials, utilities, direct and maintenance labor, and payroll 
overhead. Indirect operating costs include technical and 
clerical labor, administrative costs, facilities maintenance and 
supplies, and research. Other costs in the analysis are fixed 
charges, including local taxes, insurance, depreciation, 
deferred expenses, interest payments (if any), and return on 
investment. 

The cost elements of aluminum production are discussed 
in the following sections. 



MINE AND MILL CAPITAL COSTS 

Mine and mill capital costs (in 1980 dollars) for a new 
bauxite-mining operation can range from about $19 million 
for a relatively small operation requiring little or no 
infrastructure to almost $500 million for a large operation 
requiring extensive infrastructure such as rail and port 
facilities. l\/lost new mining operations, either planned or 
under construction, tend to be quite large with planned 
capacities of 3 to 11 million tons per year (tpy). A typical 
example of a new bauxite operation is the recently completed 
Trombetas Mine in Brazil, which has a capacity of 3.35 
million tpy and cost approximately $230 million. Following are 



other examples of capital costs (in 1980 dollars) for 
developing or potential operations: 

According to MAS estimates, the planned Paragominas 
Mine in Brazil will produce about 6.9 million tpy and will cost 
around $480 million (including $240 million for infrastructure). 

The Mount Saddleback Mine and adjacent Worsley 
refinery in Western Australia are estimated to cost $1 billion. 
The mine plant and equipment and conveyor system are 
estimated to cost $320 million, the refinery approximately 
$300 million, and related infrastructure about $380 million. 

An integrated operation at Aurukun in northern Queens- 
land, Australia, is estimated at approximately $1.3 billion. 
The mine plant and equipment for a 2.3-million-tpy bauxite 
operation would cost about $300 million, the refinery about 
$300 million, the smelter some $260 million, and related 
infrastructure for the entire operation about $440 million. 

The Tougue deposit in Guinea, if developed as an 
8-million-tpy operation, is estimated at $98 million for the 
mine plant and equipment, and at least $144 million for the 
railroad, expansion of the port at Conakry, power supply, and 
housing. If a 1-million-tpy refinery were built at Dabola, the 
estimated additional capital cost would be $825 million. 

Development of the Kibi bauxite deposit in Ghana as a 
2-million-tpy operation would cost approximately $12.5 
million for preproduction development, $1 1 million for mine 
equipment, and $8 million for mine plant. Related infrastruc- 
ture for railroad, power, and townsite facilities would cost 
approximately $150 million. A proposed 600,000-tpy alumina 
refinery at Tema would cost approximately $600 million; if a 
second smelter of 200,000-tpy capacity is built at Tema, the 
cost is estimated at $1 billion. 



MINE AND MILL OPERATING COSTS 

The direct operating costs of bauxite mining and milling are 
composed of five factors, broken down by percentage of 
mining and milling operating costs: 

Labor— 27 to 32 pet. 

Fuel oil— 8 to 9 pet. 



12 



Diesel fuel, lubricants, and tires — 15 to 19 pet. 

Maintenance — 21 to 27 pet. 

Miscellaneous costs — 18 to 21 pet. 
Although mine and mill operating costs around the world vary 
widely, these differences have little effect on variations of the 
total cost of aluminum Ingot. An analysis of actual and 
potential mines in five of the major producing countries 
shows which factors contribute to the variability of operating 
costs. The following countries are discussed: Australia, 
Brazil, Guinea, Guyana, and Jamaica. 

Australia 

Ten bauxite mines and deposits with actual or potential 
capacities ranging from 2,100,000 to 13,200,000 tpy were 
evaluated. Overburden is generally less than 1 m thick, and 
the average ore thickness ranges from 2.4 to 5.5 m. Most of 
the gravelly overburden is removed by scrapers, with dozers, 
front-end loaders, and, to a lesser extent, off-highway trucks. 
Blasting is required to break the hard-rock cap present at the 
surface of the bauxite in the western part of Australia, but this 
does not apply to the other deposits in the country. In the 
Darling Range, most of the overburden is removed by Euclid 
TS-14 scrapers and Caterpillar D9 bulldozers with attendant 
front-end loaders and off-highway trucks. When most of the 
gravel overburden has been removed in this manner, 
material in the hollows of the undulating cap rock is removed 
by backhoe and, with the gravel overburden, is hauled to a 
special surface stockpile reserved for use in land reclama- 
tion. The cap rock in the Darling Range must be blasted. Del 
Park uses Gardner Denver RDC-16B rotary blasthole drills to 
drill 1 1 5-mm holes on a 3.5- by 3.5-m pattern. Averaging 3 m 
in depth, the holes are loaded with an ammonium nitrate-fuel 
oil (ANFO) mixture and detonated with Anzomes primers and 
Cordtex. About 5,400 tons of bauxite is blasted per pattern. 
Mining is performed with 12- to 15-ton front-end loaders, 
which load the bauxite into rear-dump off-highway trucks that 
haul the ore from the pits to the crusher. The more scattered 
occurrences of ore bodies at Del Park, Huntly, and Mount 
William have led to the use of mobile crushing stations and 
conveyor haulage to the refineries. 

Bauxite in the Northern Territory and Queensland is 
usually loose and friable with little or no cap rock. Minor 
drilling may be necessary, and ripping the cap rock is 
occasionally required. Clearing topsoil and removing over- 
burden are usually done during the dry season; mining the 
bauxite continues year round. At Weipa, mining begins by 
clearing trees and scrub in the wet season; the amassed 
windrows are burned during the dry season. Topsoil and 
overburden are removed during the dry season by tandem- 
powered push-pull scrapers of 33-m^ capacity or, in some 
cases, 29-m= standard-wheel tractor scrapers. Often the 
topsoil and overburden are placed directly on the floor of 
adjacent mined-out areas and made ready for revegetation 
during the following wet season. Mining operations are 
carried out on a two-shift-per-day, 1 0-hr-per-shift basis. A 
5-day workweek is normal, unless the stockpile gets low. 

The ore at Weipa is free flowing with only occasional areas 
of cap rock that require ripping. The in situ bauxite is 
sufficiently loose to permit excavation without drilling and 
blasting. At the Andoom Mine, track-mounted hydraulic 
excavators with 10-m^ buckets load the friable ore into 80-ton 
rear-dump trucks. Andoom is connected to the Lorim mill by a 
19-km railway, limiting the average haul distance per truck to 
3,000 m. The railhead at Andoom can be relocated so the 
mining operations are kept within a certain radius of the 
railhead. 

Mine operating costs throughout Australia range from 
$2.80 to $6.60 per ton, including removal of the overburden 
and ore, reclamation, transportation to the crusher, crushing, 
drying (for exported ore), and stockpiling for transportation to 
the refinery. Calcining costs for abrasive-grade bauxite are 
not included. Haulage methods include truck, rail, and 



conveyors, with the different methods occasionally being 
used at the same mine. As distances to crushers increase, 
mobile crushers and conveyors are sometimes used to 
combat rapidly escalating haulage costs. The distance to the 
crusher varies widely between mines and even between 
different areas within the same mine. Transportation costs to 
the refinery (or port) range from $0. 1 to $4. 1 per ton of ore, 
depending on the method of transport and distance. The 
most variable cost factor affecting operating cost appear to 
be the size of operation, haulage method and distance, 
continuity of the ore, and presence of a cap rock that requires 
blasting. 

Brazil 

The seven mines and deposits evaluated have actual or 
potential production capacities ranging from 400,000 to 
15,000,000 tpy. For removing overburden, the mines use 
scrapers, shovels, front-end loaders, dozers, and/or drag- 
lines. Ore is mined by backhoe, and the average ore 
thickness ranges from 2 to 7 m. At Trombetas, overburden is 
removed by two 13-m^ Bucyrus Erie walking draglines; lesser 
amounts are removed by four Caterpillar 631 scrapers 
pushed by D8 bulldozers. Consisting of clay, gravel, or 
nodular bauxite and ferruginous laterite, the overburden is 
removed to expose the bauxite bed in a 254-m-wide strip. 
Blasting is occasionally required in the hard layer, which is 
about 1.5 m thick on the top of the massive bauxite bed. 
Blastholes 90 mm in diameter are drilled with two truck- 
mounted auger units. The blasting agent, ANFO, is used at 
the rate of 77 g per ton of broken material. 

Normally, the hard bauxite at Trombetas is loaded with 
three 4.6-m^ 190 Northwest backholes. Five Caterpillar 988 
front-end loaders equipped with 4.5-m^ buckets are also 
available for loading in the mine and reclaiming from 
stockpile. The bauxite is loaded into Caterpillar 939 trucks 
outfitted with lightweight aluminum beds to increase their 
capacity from 32 to 35 tons. The haulage distance to the 
crusher, currently 2 km, will increase to 4 km as mining 
continues. 

Mining and milling costs in Brazil range from $4.20 to $7 
per ton with beneficiation costs for refractory-grade bauxite 
ranging from $40 to $66 per ton of calcined bauxite. 
Transportation costs to the port or refinery range from $1 to 
$7.80 per ton, depending on distance and terrain. Most of the 
variations in operating costs are due to the varying haulage 
distances from the mine to the mill. 

Guinea 

' Six mines and deposits with actual or potential capacities 
from 1 ,500,000 to 9,000,000 tpy were evaluated. The typical 
Guinea bauxite deposit forms the cap of a flat-topped 
mountain about 100 m higher in elevation than the 
surrounding valley. The overburden is up to 0.5 m thick, and 
the bauxite is up to 30 m thick. Mining may be done by either 
electric shovels or front-end loaders, with haulage by truck or 
rail. All ore is drilled and blasted. 

At Sangaredi, the ore is drilled, blasted, and loaded from 
12- to 15-m-high benches into 70-ton railroad cars. Loading 
is by means of two P&H 1 900 electric shovels on each shift, 
with a third shovel as standby. A 1 ,000-hp locomotive pulls 
20 to 25 cars around the loop in front of each shovel. As the 
shovels progress along the face, panels of prefabricated 
track, each 18 m long, are laid on the graded ground behind 
them. When the cut has been completed, the new track is 
connected to the loop, and the old track is ready for the next 
stage of track laying. The loaded train is moved back to the 
switchyard where 80- to 90-car trains are made up to haul to 
the Kamsar plant, where the ore is unloaded, crushed, dried 
(or calcined), stockpiled, and shipped. The ore is loaded 21 
shifts per week at the rate of 650,000 tons per month. 

Although mining and milling costs in Guinea range from 



13 



$2.25 to $6.45 per ton, transportation costs to the port from 
several deposits in the interior are very high because of 
haulage distances of up to 500 km. Transportation costs to 
the refinery or port range from $0.50 up to $1 1 per ton. 

Guyana 

The 1 1 Guyanese mines evaluated are all open pit mines, 
with a stripping ratio between 8:1 and 10:1. Output ranges 
from 108,000 to 1,500,000 tpy. Overburden is 15 to 69 m 
thick, and the bauxite ore may be up to 1 5 m thick. Primary 
stripping is usually done by bucket-wheel excavator systems, 
with scrapers and hydraulic mining being used to a lesser 
extent. The remaining overburden is removed by walking 
draglines. At some mines, the top of the bauxite is cleaned off 
with bulldozers. A cap rock from 0.3 to 2 m thick on top of the 
ore is discarded because of its high silica content. The 
bauxite is blasted, mined, loaded, and trucked to a stockpile 
to await until rail or barge transport to the Linden or Everton 
mills. Heavy rainfall, inadequate drainage, and clayey soil 
result in difficult mining conditions. No land reclamation is in 
progress since the mines are in remote areas and do not 
affect any major agricultural areas or population centers. 
Total mining and milling costs range from $6.50 to $8.25 per 
ton of ore, with transportation costs to the refinery or port 
ranging from $0.25 to $3.50 per ton. Mines with lower 
stripping costs usually have higher haulage costs; thus, there 
is little variation in the total cost. The cost for beneficiating 
refractory-grade bauxite runs from $58 to $61 per ton of 
calcined bauxite. 

Jamaica 

Fifteen Jamaican mines and deposits with actual or 
potential capacities of 1,000,000 to 5,000,000 tpy were 
evaluated. Filling karst depressions and sinkholes in highly 
fractured limestone, these deposits reflect the fault systems 
and lineation patterns of the limestone. The areal extent of 
each deposit varies greatly, with the thickness of the bauxite 
extending up to 43 m. Only one mine had overburden 
exceeding 1 m in thickness. Overburden is usually stripped 
by scrapers or bulldozers; and most mining is done by 
draglines and shovels, with loading by front-end loaders. 
Transportation from mine to mill or mine to refinery is by 
truck, rail, conveyor, or aerial tram. 

At the Kirkvine Mine, Caterpillar 631 B tractor scrapers strip 
the overburden; the stripped overburden (topsoil) is stock- 
piled for reclamation. Mining is conducted by one 5.7-m^ 
Baldwin Lima Hamilton 2400B dragline, one Caterpillar 992 
7.7-m^ loader, and one Warner Swasey 3.5-m^ backhoe. The 
dragline and front-end loader work with a Caterpillar D9 
bulldozer, which rips and cleans the pit face. Ore is hauled in 
eight Caterpillar 773 50-ton trucks to a central stockpile. 
Haulage distances average 2.6 km on 15-m-wide haul roads 
with a maximum 6-pct grade. The ore from the stockpile is 
transported to the alumina plant by a 1.8-km-long English 
cable belt conveyor. 

Mining costs in Jamaica range from $4 to $5 per ton, 
including haulage costs for locally refined bauxite. Milling 
costs, mainly drying, for exported bauxite range from $1 .80 to 
$2 per ton. Locally refined bauxite is not dried and incurs no 
milling cost. 



LEVIES, ROYALTIES, AND 
TRANSPORTATION 

Other elements that greatly affect the cost of bauxite 
include capital charges, production taxes or levies, royalties, 
and transportation to the refinery. The bauxite levies and 
royalties charged by the main bauxite-producing countries 
are shown in table 8. 



Table 8. 



Country 



Bauxite levies and royalties in the 
main bauxite-producing countries 



Levy 



Royalty' 



Comments 



Australia None. 



Dominican 
Republic. 



7.7 pet of U.S, 
Ingot price. 



Variable; ranges 
from nil to 
$1 .20/ton. 

$0,60/ST 



Ghana None. 



6 pet of realized 
value of ore 
plus mineral 
duty of 1 pet 
on realized ore 
selling price. 



Nil applies to 
Alcoa, which 
pays royalties 
on alumina. 

Alcoa now pays a 
minimum of 
$17 per ton in 
lieu of levy. 



Guinea 

Guyana 


. Ranges from 0.5 
to 0.75 pet of 
price of ingot 
depending on 
grade of 
bauxite. 

. None 


None 

$0.04 to $0.10 
per LDT. 


Haiti 


. 7.5 pet of U.S. 
ingot price. 


$0.50/ST 


Indonesia 

Jamaica 


. 10 pet of FOB 
export value. 

. 5.5 to 6.8 pet of 
U.S. ingot 
price. 


Mineral tax of 

$0.60/ton. 
$0.55/LDT 


Sierra Leone . . 
Suriname 


. None 

. 5.2 pet of U.S. 
ingot price. 


$0.27/ton 

$0.50/LDT 



All operations 

Government 

owned. 
Levy indexed to 

Reynolds U.S. 

ingot price. Use 

ratio of 5 

ST = 1 ST 

metal. 



Levy variable 
depending on 
base price; rate 
decreases as 
base price 
increases. 

Levy based on 
Alcoa U.S. 
ingot price. 



' LDT— long dry ton; ST — short ton. 

Sources: The World Aluminum Industry, v. 1 ; Australian Mineral 
Economics Pty. Ltd., Sydney, Australia, 1981, 410 pp.; the Jamaica Bauxite 
Institute; and the International Bauxite Association. 



Calculations for determining the amount of levy charged by 
a producing country are exemplified in the following sample 
levy: 

If the rate of a sample levy on 1 LDT (long dry ton) of 
bauxite is 6 pet of the ARP (average realized price) of 1 ST 
(short ton) of primary aluminum, the levy is related to the 
average realized price of aluminum according to the following 
formula (3): 

L=- (PARC), 

where L = the production levy per LDT of bauxite, P = the 
bauxite tax per pound of aluminum as a percent of PARC, F 
= the LDT of bauxite required to produce 1 ST of aluminum, 
and PARC = the average realized price of primary aluminum 
per ST in U.S. dollars. At an average price of $0.72 per 
pound for primary aluminum, the total levy per LDT of bauxite 
is equal to: 



0.06 
4.3 



(2000) (0.72) = $20.09. 



The 4.3 in the denominator is the bauxite equivalent in LDT of 
1 ST (2,000 lb) of metal. This figure is based on a 
bauxite-alumina conversion factor of 2.2 LDT/ST and an 
alumina-aluminum factor of approximately 1.95/1. The 
bauxite-equivalent factor will vary among countries, depend- 
ing on their average grade of bauxite. The 4.3 factor applies 
to Jamaica and some other countries. 



14 



Table 9. — Selected bauxite shipping costs^ 



Source of bauxite 



Destination of shipment 



Freight cost, U.S. dollars per ton 



Date of freight cost 



Australia: 

Gove. Northern Territory 



Weipa. Queensland 



Weipa-Gove . 
Brazil: Amazon. . . 



Dominican Republic: 
Cabo Rojo 

Greece: Itea 

Guinea: 

Port Kamsar 



Indonesia: 

Bintan Island . 
Jamaica: 

Various ports . 

Port Rhoades. 



Stade, Germany. 



Gladstone. Queensland . 

Porto Vesme, Italy 

Netherlands-Germany. . . 

Germany 

Japan 

U.S. gulf 

United States 



Texas, U.S.A. 
Taranto, Italy 



U.S. gulf 

Canada (Port Alfred, Quebec) 

Europe 

Yugoslavia 



Rotterdam, Netherlands. 



United States 

Louisiana, U.S.A.. 



10.50-12.50 


Feb. to June 1979 


20.00-21.50 


Jan. to June 1980. 


17.00 


Nov. 1980. 


18.75 


Jan. to April 1981. 


8.00 


May 1981. 


12.50-12.65 


Jan. to May 1979. 


18.00 


Nov. 1980. 


17.50 


Mar. 1981. 


15.00-20.00 


May 1981. 


7.50 


Nov. 1979. 


8.00- 9.50 


Sept. 1980. 


5.50 


April 1980. 


5.50 


Mar. 1980. 


10.25 


May 1981. 


10.50 


May 1981. 


10.50 


May 1981. 


20.00 


Aug. 1980. 


14.00-14.50 


Mid-1979. 


4.40- 4.90 


Sept. 1980. 


5.50 


May 1981. 



Costs shown are "spot prices," which would normally be higher than prices paid under long-term contracts or on company-owned ships. 



With the exception of the Dominican Republic, all the 
countries listed in table 9 also charge corporate income tax 
on any profits earned by mining companies engaged in 
producing bauxite within the individual country. 

An overview of bauxite shipping costs is presented in table 
9 based on cost data collected and published by Australian 
Mineral Economics Pty. Ltd. (2, p. 247). As shown in table 9, 
the Caribbean countries have a significant cost advantage in 
shipping to the United States compared with the shipping 
costs of bauxite from Brazil or Guinea. This advantage is 
overshadowed, however, by the higher bauxite levies the 
Caribbean countries charged. 

The IBA has furnished a comparative cost estimate (in 
1 980 dollars) for bauxite delivered to the United States from 



new operations in Australia, Brazil, and Jamaica. These 
estimates of the total cost per ton of bauxite (including 
servicing of capital) ranged from $22.70 to $25.60 for 
Australia, $21 .00 to $23.90 for Brazil, and $37.60 to $39.00 
for Jamaica. Of these costs, transportation accounted for 57 
pet of the total delivered cost of bauxite from Australia, about 
38 pet for Brazil, and slightly over 11 pet for Jamaica. The 
higher cost for Jamaican bauxite is caused by the bauxite 
levy, which accounted for over 63 pet of the total cost of 
Jamaican bauxite at the end of 1979. 

Estimated operating costs for the bauxite operations 
analyzed in this study, by country, are shown in table 10. 
Since showing cost data for individual operations would 
divulge confidential information, the data shown for each 
country are a weight average of individual-property cost data. 



Table 10. — Operating costs of bauxite 
production^ 

Mine and mill Transportation Levy or Total cost at 
Country operating to port or severance port or local 

cost refinery tax refinery 

Australia $4.47 $1.12 $1.20 $6.79 

Brazil 5.64 4.13 1.00 10.77 

Costa Rica 6.28 .30 6.58 

Dominican Republic . 7.19 1.00 ^23.20 31.39 

France 9.08 5.96 15.04 

French Guiana 17.58 2.00 19.58 

Ghana 6.38 4.95 3.42 14.75 

Greece 12.81 4.00 16.81 

Guinea 5.44 6.56 9.50 21 .50 

Guyana 7.77 1 .27 .05 9.09 

Haiti 8.73 1 .36 23.69 33.78 

India 3.24 2.96 .49 6.69 

Indonesia 8.51 3.46 1.05 13.02 

Jamaica 5.61 .85 ^21.00 27.46 

Malawi 2.80 2.50 5.30 

Sierra Leone 7.10 4.25 .27 11.62 

Suriname 8.42 2.17 18.50 29.09 

Turkey 1 5.05 4.20 9.00 28.25 

United States 15.09 15.09 

Venezuela 5.00 7.76 12.76 

' Costs presented for each country are a weight average of estimated 
operating costs for all the mines and deposits evaluated in this study. The 
assumptions used in determining whether bauxite was exported or refined 
domestically are presented in appendix A. 

^ Alcoa pays a flat rate of approximately $17 per ton of bauxite in lieu of 
the levy or corporate income taxes. Using a $17-per-ton rate of tax would 
reduce the FOB (port) cost of bauxite to $25.19. 

^ The Jamaican bauxite levy was reduced at the end of 1979. The 
average levy for Jamaica in 1980 was closer to $16 per ton. Using a $16 
levy would reduce Jamaica's average cost at the port or local refinery to 
$22.46. 



COST ELEMENTS OF 
ALUMINA REFINING 

Capital and operating costs for typical alumina refineries in 
the United States, Western Europe, and Australia have been 
estimated for this study. Although these refineries are 
^hypothetical, the costs are typical of those a new refinery of 
800,000-tpy capacity would incur in each of the three areas. 
All the capital and operating costs for new refineries in this 
study use or adapt these models. 

Capital Costs 

Capital costs for alumina refineries, or for any large 
construction project, are strongly influenced by many factors, 
including {8, p. 33) — 

access to site 

topography of site 

environmental penalties 

availability of infrastructure 

time scale of construction 

climate 

availability of skilled labor 

industrial relations 

labor rates 

access to materials 

import duties 

The cost models for new refineries were developed on the 
following assumptions: 



15 



Table 11. — Typical alumina refinery capital 
costs^ 





Bayer high 
temperature. 
United States 


Bayer 


low temperature 




United States 


Europe 


Australia 


Bauxite source Caribbean 

Capital cost, thousand U.S. dollars: 

Onsite 470,000 

Offsite 75,000 


Africa 

445,000 
75,000 


Africa 

465,000 
75,000 


Australia 

485,000 
90,000 


Total fixed . . 
Working capital 


545,000 
20,000 


520,000 
20,000 


540,000 
20,000 


575,000 
20,000 


Total 

Cost per annual ton 
capacity 


565,000 
$710 


540,000 
$675 


560,000 
$675 


595,000 
$745 



' Capital costs are in 1979 dollars because of the assumption that the 
refinery began production in that year. A refinery beginning production in 
1980 would have a higher capital cost. 



1 . The economic life of the plant over which the assets are 
depreciated is 20 years. 

2. Of the total capital cost of the plant, 70 pet is funded 
through long-term (20-year) loans on which the real rate of 
interest is 5 pet; the remaining 30 pet is funded through equity 
capital on which the real pretax rate of profit is 1 pet. 

3. The rated capacity of the refineries is 800,000 tpy; they 
would operate at 95 pet of capacity with annual production of 
760,000 tpy of metal-grade alumina. The year of plant startup 
is 1979. 

4. The cost estimates refer to new plants at new sites, with 
adequate basic infrastructure assumed to exist at the plant 
locations. 



Estimated capital costs for the three regions, in 1979 U.S. 
dollars, are shown in table 1 1 ; published estimates of capital 
costs for worldwide refinery projects are presented in table 
A-2. 



Operating Costs 

The operating cost models of the four typical refineries 
included in this study are shown in tables 12, 13, 14, and 15. 
For each refinery, input requirements of raw materials, 
utilities, and operations have been estimated. In addition, the 
costs for these input factors — as well as administrative costs, 
capital charges, and profit — have been calculated. Following 
is a discussion of some of these factors. 

Raw Materials 

Excluding the bauxite cost, raw-material input cost for 
alumina production is not a major element of the refining 
process total cost. However, the chemical composition of the 
bauxite used is an important determinant of alumina-refining 
costs. The main factors determining the raw-material inputs 
and, therefore, the conditions for digestion and energy 
requirements for alumina refining are as follows: 

1 . The "available" alumina content of the bauxite ore. 

2. Impurities in the bauxite, especially the reactive silica 
content. 

3. The proportions of monohydrate to hydrate in the ore. 

4. The degree of recovery and recycling of the caustic 
soda. 

5. The caustic makeup. 

6. The moisture content of the bauxite ore feed. 



Table 12. — Estimated refinery operating costs 
for processing Caribbean bauxite in 
the United States' 

Units of input Unit cost per 

ton AI2O3 
Raw materials: 

Caribbean bauxite (2.52 tons/ton) NAp 

Caustic soda (89 kg/ton at $140/ton) $12.46 

Other materials 2^ 

Subtotal 14.75 

Utilities: 

Fuel oil (400 I/ton at 13.1(6/1) 52.32 

Electricity (200 kWh/ton at 2.94c/kWh)2 5^ 

Subtotal 58.20 

Operations: 

Direct labor and supervision (1 .0 worker-hr at 

$12.43/worker-hr) 12.43 

Direct labor overhead (60 pet of direct labor) 7.46 

Maintenance (2.5 pet of fixed capital cost) 17.93 

Subtotal 37.82 

Administration: 

Administration and sales (10 pet of direct labor) 1 .24 

Property tax and insurance (1 .5 pot of fixed capital cost) ^ 10.76 

Subtotal 12.00 

Cash cost of production ^1 22.77 

Capital charges: 

Depreciation 35.86 

Loan interest 26.02 

Subtotal 61.88 

Total costs of production FOB 1 84.65 

Pretax equity profit 22.30 

Total cost and profit FOB 206.95 

NAp Not applicable. 

' Cost of bauxite excluded; costs are 1980 U.S. dollars. 

^ Estimated average kilowatt-hour charge for new operations. 

^ For this study, when it was assumed that a new refinery would be built, 
the operating cost used in the economic analysis is the cash cost of 
production, since depreciation and profit are accounted for in the cash-flow 
analysis. If a toll charge is assumed, the cost charged is the total cost and 
profit FOB. 



Table 13. — Estimated refinery operating costs 
for processing West African bauxite 
in the United States' 

Units of input Unit cost per 

ton AI2O3 
Raw materials: 

West African bauxite (2.22 tons/ton) NAp 

Caustic soda (36 kg/ton at $1 40/ton) $5.04 

Other materials 229 

Subtotal 7.33 

Utilities: 

Fuel oil (400 I/ton at 13.1 C/l) 52.32 

Electricity (200 kWh at 2.94c/kWh)2 5^ 

Subtotal 58.20 

Operations: 

Direct labor and supervision (1 .0 worker-hr at 

$12.43/worker-hr) 12.43 

Direct labor overhead (60 pet of direct labor) 7.46 

Maintenance (2.5 pet of fixed capital cost) 17.11 

Subtotal 37.00 

Administration: 

Administration and sales (10 pet of direct labor) 1 .24 

Property tax and insurance (1 .5 pet of fixed capital cost) . 10.26 

Subtotal 11.50 

Cash cost of production ^114.03 

Capital charges: 

Depreciation 34.21 

Loan interest 24.87 

Subtotal 59.08 

Total costs of production FOB 173.11 

Pretax equity profit 21.32 

Total cost and profit FOB 194.43 

NAp Not applicable. 

' Cost of bauxite excluded; costs are 1980 U.S. dollars. 

^ Estimated average kilowatt-hour charge for new operations. 

^ For this study, when it was assumed that a new refinery would be built, 
the operating cost used in the economic analysis is the cash cost of 
production, since depreciation and profit are accounted for in the cash-flow 
analysis. If a toll charge is assumed, the cost charged is the total cost and 
profit FOB. 



16 



Table 14. — Estimated refinery operating costs 
for processing West African bauxite 
in Western Europe' 

Units of input Unit cost per 

ton AI2O3 
Raw materials: 

West African bauxite (2.22 tons/ton) NAp 

Caustic soda (36 kg^n at $1 58 ton) $5.70 

Other materials 2.17 

Subtotal 7.87 

Utilities: ~ 

Fuel oil (400 I ton at 14.3c I) 57.11 

Electricity (200 kWh at 3.02c kWh)^ 6^ 

Subtotal 63.15 

Operations: 

Direct labor and supervision (1.0 worker-hr at 

S11.16worker-hr) 11.16 

Direct labor overhead (50 pet of direct labor) 5.58 

Maintenance (2.5 pet of fixed capital cost) 17.76 

Subtotal 34.50 

Administration: 

Administration and sales (10 pet of direct labor) 1.12 

Property tax and insurance (1.5 pet of fixed capital cost) 10.66 

Subtotal 11?78 

Cash cost of production ^11 7.30 

Capital charges: 

Depreciation 35.53 

Loan interest 25.79 

Subtotal 61^ 

Total costs of production FOB 1 78.62 

Pretax equity profit 22.1 1 

Total cost and profit FOB 200.73 

NAp Not applicable. 

' Cost of bauxite excluded: costs are 1980 U.S. dollars. 

^ Estimated average kilowatt-hour charge for new operations. 

^ For this study, when it was assumed that a new refinery would be built, 
the operating cost used in the economic analysis is the cash cost of 
production, since depreciation and profit are accounted for in the cash-flow 
analysis. If a toll charge is assumed, the cost charged is the total cost and 
profit FOB. 



Table 15. — Estimated refinery operating costs 
for processing Australian bauxite in 
Australia' 

Units of input Unit cost per 

ton AI2U3 
Raw materials: 

Australian bauxite (3.47 tons/ton) NAp 

Caustic soda (56 kg/ton at $159/ton) $8.91 

Other materials 2.27 

Subtotal 11.18 

Utilities: 

Fuel oil (400 I/ton at 16.1C/I) 64.51 

Electricity (200 kWh at 2.708c/kWh)2 541^ 

Subtotal 69.92 

Operations: 

Direct labor and supervision (1 .0 worker-hr at 

$9,39/worker-hr) 9.39 

Direct labor overhead (50 pet of direct labor) 4.70 

Maintenance (2.5 pet of fixed capital cost) 18.91 

Subtotal 33.00 

Administration: 

Administration and sales (10 pet of direct labor) .94 

Property tax and insurance (1 .5 pet of fixed capital cost) . 1 1 .35 

Subtotal 12.29 

Cash cost of production ^1 26.39 

Capital charges: 

Depreciation 37.83 

Loan interest 27.40 

Subtotal 65.23 

Total costs of production FOB 1 91 .62 

Pretax equity profit 23.49 

Total cost and profit FOB 21 5.1 1 

NAp Not applicable. 

' Cost of bauxite excluded; costs are 1980 U.S. dollars. 

^ Estimated average kilowatt-hour charge for new operations. 

^ For this study, when it was assumed that a new refinery would be built, 
the operating cost used in the economic analysis is the cash cost of 
production, since depreciation and profit are accounted for in the cash-flow 
analysis. If a toll charge is assumed, the cost charged is the total cost and 
profit FOB. 



7. The choice of temperatures, pressures, concentrations, 
times, and tank sizes used in the digestion process. 

The quantity of bauxite input required to produce 1 ton of 
alumina can range from a minimum of 2.1 tons to a maximum 
of 3.5 tons from some of the newer Australian deposits, 
depending on AI2O3 grade and silica content. Generally, 1.1 
units (unit weight) of alumina and 1 .2 units of soda are lost for 
each unit of reactive silica in the ore. Thus, the reactive silica 
content of the ore will increase both the quantity of bauxite 
required and caustic soda consumption. The loss of soda is 
made up by adding caustic soda or soda ash to the spent 
leach solution to reach the appropriate caustic concentration 
before recycling. The reactive silica content of different 
bauxites can vary considerably: for West African and 
Western Australian bauxites, it is low (1-2 pet); for Jamaican 
bauxite, it is moderate (approximately 3 pet); and it may 
reach 5 pet (after washing) in the case of the Weipa deposit 
in Northern Queensland, Australia. 

Energy Requirements 

Most of the energy required for alumina refining is 
consumed in producing steam and power and in calcining 
alumina. A clean fuel source such as fuel oil or natural gas is 
used to avoid contaminating the calcination product; 
coal-derived gases may become economic in the future. Any 
type of fuel may be used for steam and power generation, but 
common practice is to use the same fuel source as used for 
calcination. A "typical" refinery would consume 400 1 of fuel 
oil and 200 kWh of electricity to produce 1 ton of alumina, 



which (excluding the cost of bauxite) would represent some 
24 pet of the total operating cost of the refinery. 

Labor Costs 

Direct-labor inputs per unit of output, relatively low in 
producing alumina, constitute a small percentage of total 
dperating costs. Based on the cost models used, direct labor 
and supervision, overhead, and maintenance would amount 
to some 19 pet of the total operating cost of a U.S. alumina 
refinery. This percentage would be similar to other developed 
countries. 

Transportation 

As with bauxite, shipping costs for alumina are a significant 
factor in the overall delivered cost of alumina. A sample of 
freight rates for shipment of alumina is shown in table 16. 

COST ELEMENTS OF 
ALUMINUM SMELTING 

Capital Costs 

With the same methodology as used for alumina refineries, 
capital and operating costs for "typical" new aluminum 
smelters in the United States, Western Europe, Japan, and 
Australia have also been estimated. These estimates 
represent the typical costs that would be incurred by the 
construction of a new smelter of 200,000-tpy capacity in each 



17 



Table 16. — Freight rates for shipment of 

alumina on principal international 
routes in 1 980 



Origin 



Destination 



Freight rate, 

U.S. dollars 

per ton 



i 



Australia Japan-Taiwan 

U.S. east coast 

U.S. west coast 

New Zealand 

South Africa 

Argentina 

Persian Gulf 

Egypt 

Western Europe 

Iceland 

U.S.S.R. (Black Sea) 

Caribbean United Kingdom 

Western Europe (excluding U.K.) . 

U.S. east coast 

Ghana 

Venezuela (origin Suriname) 

Canada (east coast) 

France Norway 

Greece Netherlands 

Guinea Western Europe 

Southern Europe (Italy, Austria) . . 

Cameroon 

Italy (Sardinia) Western Europe 

Japan Canada (west coast) 

Egypt 

Yugoslavia U.S.S.R 



19-20 

25-30 

16-18 

8-10 

18-20 

50 

21 .50-23 

23-25 

35-40 

31 

30-35 

19.50-22 

23-25 

8-10 

20-22 

4-5 

10 

11-12 

10 

12-15 

13-16 

8 

11-12 

16 

23-25 

10 



Source: Commodities Research Unit, Ltd. (CRU). 



of the four areas. The cost models for new smelters were 
developed on the following assumptions: 

1 . The economic life of the plant over which the assets are 
depreciated is 20 years. 

2. Of the total capital cost of the smelter, 70 pet is funded 
through long-term (20-year) loans with a real rate of interest 
of 5 pet; the remaining 30 pet is funded through equity capital 
on which the real pretax rate of profit is 1 pet. 

3. The rated capacity of each of the smelters is 200,000 
tpy, with a 95-pet-eapacity utilization and annual production 
of 1 90,000 tpy of aluminum ingot. The year of startup is 1 979. 

4. Although the cost estimates are for new smelters, it is 
assumed that adequate basic infrastructure exists at the 
smelter site and sufficient electric power is available. 

Estimated capital costs for the four regions are shown in 
table 17. Published estimates of capital costs for worldwide 
smelter projects are presented in table A-3 in the appendix. 
Many of the costs presented in the appendix for projects not 
yet completed may be understated owing to continuing 
inflation; however, they do give a valid comparison of the 
costs associated with different areas of the world. The lesser 
developed countries have higher associated capital costs 
than the developed countries because of a combination of 
higher construction costs and basic infrastructure costs, such 
as power generation and transport systems. 

Table 17. — Capital costs of typical aluminum 
smelters for cost moder 

(Thousand U.S. dollars) 

Western 
Facilities United States Europe Japan Australia 

Onsite 440,000 440,000 440,000 470,000 

Offsite 20,000 20,000 20,000 80,000 

Total fixed 460,000 460,000 460,000 550,000 

Working capital 50,000 50,000 50,000 70,000 

Total 510,000 510,000 510,000 620,000 

Cost per annual 
ton capacity 2,550 2,550 2,550 3,100 

' Capital costs are in 1979 dollars because of the assumption that the 
smelter began production In that year. A smelter beginning in 1980 would have 
a higher capital cost. 



Operating Costs 

The operating costs of the four typical smelters included in 
this study are presented in tables 18, 19, 20, and 21. The 
operating costs are broken down into three factor-input 
categories, as described in the following paragraphs. 

Raw Materials 

Raw material costs are the costs for petroleum coke and 
pitch for anode manufacture and for fluorine products for the 
electrolytic bath. Variations in the requirements for raw 
material inputs depend upon a number of factors, including — 

1 . Cell operating variables, such as current, voltage and 
size of pots, and anode type. 

2. Age and capacity of plant. 

3. Degree of control exercised in maintaining optimum 
operating conditions. 

4. Gas scrubbing systems for the recovery of fluorides. 
The cost of raw materials (not including alumina) 

constitutes some 8 to 10 pet of the total cost of aluminum 
smelting. 

Labor 

Although labor costs per worker-hour vary significantly 
around the world, the differences in labor costs as a 
percentage of total operating cost at different smelter 
locations are not substantial since labor constitutes a small 
percentage of the total operating cost. In the United States, 
direct labor costs are approximately 6 pet of the total 
aluminum production costs. 

Energy Costs 

Often accounting for up to 60 pet of the total operating cost 
of aluminum ingot production, electricity is the critical cost 
factor in aluminum smelting. Electric power costs charged to 
aluminum smelters vary widely throughout the world and are 
the principal reason for the variation in aluminum ingot 
production costs between producing locations. With an 
assumed average electricity consumption of 1 4,200 kWh per 
ton of aluminum produced, a price change of 1 mill/kWh can 
result in a variation in operating costs of $14.20 per ton of 
aluminum. Table 22 provides an overview of electric power 
costs for various aluminum smelters in 1980. 

For many years, the aluminum industry has benefited from 
low-cost, essentially subsidized power, as typified by the 
historic pricing policies of the BPA and TVA in the United 
States. In the past decade, however, increasing electricity 
demand, slow growth of nuclear power, and lack of new 
hydropower resources in the industrialized countries have 
caused growing competition for available electrical power. To 
conserve suppliers for residential and light industrial users, 
power suppliers in industrialized countries have sought to 
renegotiate contracts with aluminum companies. Conse- 
quently, industry has faced rapidly rising energy costs, 
particularly in those countries such as Japan and Italy that 
use electricity generated from imported oil. Furthermore, the 
tendency of alternative fuel sources to align their price 
structure to higher oil prices has brought about steep 
increases in the cost of electricity generated from natural gas 
and coal (10, p. 42). 

Rising energy costs have caused a net shift of new 
smelting capacity away from the traditional locations in 
industrialized nations and have caused some countries to cut 
back on existing capacity. For example, Japan reduced its 
operating capacity by 540,000 tons per year to 1.1 million 
tons in 1978 and planned cuts of an additional 400,000 tons 
by 1985 (6, p. 10). Most new smelting capacity announced in 
the past few years is to be in nations offering a comparative 
advantage in energy costs with nearby sources of bauxite 
and alumina, such as Australia, Brazil, and Indonesia. Other 
countries announcing new smelter capacity include the 
oil-producing nations in the Middle East, such as Bahrain and 



18 



Table 18. — Estimated operating costs for smelt- 
ing aluminum in the United States* 

Units of input Unit cost per 

ton Al 
Raw materials: 

Alumina (1.93 tons ton) NAp 

Petroleum coke (0.40 ton ton at $149/ton) $59.64 

Pitch (0.10 ton ton at $229 ton) 22.90 

Other materials 28.70 

Subtotal 1 1 1 .24 

Utilities: Electricity (14,200 kWh at 2.94c/kWh)2 417.20 

Operations: 

Direct lat)or and supervision (4.0 worker-hr at 

$12.43 wori<er-hr) 49.72 

Direct latx)r overhead (50 pet of direct labor) 24.86 

Maintenance (3 pet of fixed capital cost) 72.63 

Subtotal 147^ 

Administration: 

Administration and sales (70 pet of direct labor) 34.80 

Property fax and insurance (1.5 pet of fixed capital cost) . 36.31 

Subtotal 71.11 

Casting cost 81 .35 

Cash cost of production ^828. 1 1 

Capital charges: 

Depreciation 1 21 .05 

Loan interest 93.95 

Subtotal 215.00 

Total costs of production FOB 1 ,043.1 1 

Pretax equity profit 80.53 

Total cost and profit FOB 1 ,123.64 

NAp Not applicable. 

' Cost of alumina excluded; costs are 1980 U.S. dollars. 

^ Electricity charge represents an average for new producers. Actual 
rates, by region, are shown in table 22. 

^ For this study, when construction of a new smelter was assumed, the 
operating cost used in the economic analysis is the cash cost of production, 
since depreciation and profit are accounted for in the cash-flow analysis. If a 
toll charge is assumed, the cost charged is the total cost and profit FOB. 



Table 20. — Estimated operating costs for 
smelting aluminum in Japan* 

Units of input Unit cost per 

tonAI 
Raw materials: 

Alumina (1.93 tons/ton) NAp 

Petroleum coke (0.40 ton/ton at $227.00/ton) $90.83 

Pitch (0.10 ton/ton at S293.00/ton) 29.30 

Other materials 36 62 

Subtotal 156.75 

Utilities: Electricity (14,200 kWh at 7.49c/kWh)^ 1,063.58 

Operations: 

Direct labor and supervision (4.0 worker-hr at 

$10.04/worker-hr) 40.15 

Direct labor overhead (60 pet of direct labor) 24.09 

Ivlaintenance (3 pet of fixed capital cost) 72.63 

Subtotal 136.87 

Administration: 

Administration and sales (70 pet of direct labor) 28.10 

Property tax and insurance (1 .5 pet of fixed capital cost) . 36.31 

Subtotal 64.41 

Casting cost 81.50 

Cash costs of production ^1,503.11 

Capital charges: 

Depreciation 1 21 .05 

Loan interest 93.95 

Subtotal 215.00 

Total costs of production FOB 1 ,718.1 1 

Pretax equity profit 80.53 

Total cost and profit FOB 1 ,798.64 

NAp Not applicable. 

' Cost of alumina excluded; costs are 1980 U.S. dollars. 

^ Electricity charge represents an average for new producers. Actual 
rates, by region, are shown in table 22. 

^ For this study, when construction of a new smelter was assumed, the 
operating cost used in the economic analysis is the cash cost of production, 
since depreciation and profit are accounted for in the cash-flow analysis. If a 
toll charge is assumed, the cost charged is the total cost and profit FOB. 



Table 19. — Estimated operating costs for smelt- 
ing aluminum in Western Europe* 

Units of input Unit cost per 

ton Al 
Raw materials: 

Alumina (1 .93 tons/ton) NAp 

Petroleum coke (0.40 ton/ton at $169/ton) $67.46 

Pitch (0.10 ton/ton at $244.80/ton) 24.48 

Other materials 27.20 

Subtotal 119.14 

Utilities: Electricity (14,200 kWh at 3.015c/kWh)= 428.13 

Operations: 

Direct labor and supervision (4.0 worker-hr at 

$1 1 .16, worker-hr) 44.64 

Direct labor overheao (50 pet of direct labor) 22.32 

Maintenance (3 pet of fixed capital cost) 72.63 

Subtotal 139.59 

Administration: 

Administration and sales (70 pet of direct labor) 31 .25 

Property tax and insurance (1.5 pet of fixed capital cost) ^ 36.32 

Subtotal 67.57 

Casting cost 81.79 

Cash costs of production ^836.22 

Capital charges: 

Depreciation 1 21 .05 

Loan interest 93.95 

Subtotal 215.00 

Total costs of production FOB 1 ,051 .22 

Pretax equity profit 80.53 

Total cost and profit FOB 1,131.75 

NAp Not applicable. 

' Cost of alumina excluded; costs are 1980 U.S. dollars. 

'^ Electricity charge represents an average for new producers. Actual 
rates, by region, are shown in table 22. 

- For this study, when construction of a new smelter was assumed, the 
operating cost used in the economic analysis is the cash cost of production, 
since depreciation and profit are accounted for in the cash-flow analysis. If a 
toll charge is assumed, the cost charged is the total cost and profit FOB. 



Table 21. — Estimated operating costs for 
smelting aluminum in Australia* 

Units of input Unit cost per 

ton Al 
Raw materials: 

Alumina (1.93 tons/ton) NAp 

Petroleum coke (0.40 ton/ton at $176.00/ton) $70.43 

Pitch (0.10 ton/ton at $289.70/ton) 28.97 

Other materials 28.40 

Subtotal 1 27.80 

Utilities: Electricity (14,200 kWh at 2t/k\Nhf 284.03 

Operations: 

Direct labor and supervision (4.0 worker-hr at 

$9.39/worker-hr) 37.56 

" Direct labor overhead (50 pet of direct labor) 18.78 

Maintenance (3 pet of fixed capital cost) 86.84 

Subtotal 143T8 

Administration: 

Administration and sales (70 pet of direct labor) 26.29 

Property tax and insurance (1 .5 pet of fixed capital cost) . 43.42 

Subtotal 69.71 

Casting cost 81.93 

Cash costs of production ^706.65 

Capital charges: 

Depreciation 144.74 

Loan interest 114.21 

Subtotal 258.95 

Total costs of production FOB 965.60 

Pretax equity profit 97.89 

Total cost and profit FOB 1 ,063.49 

NAp Not applicable. 

' Cost of alumina excluded; costs are 1980 U.S. dollars. 

^ Electricity charge represents an average for new producers. Actual 
rates, by region, are shown in table 22. 

^ For this study, when construction of a new smelter was assumed, the 
operating cost used in the economic analysis is the cash cost of production, 
since depreciation and profit are accounted for in the cash-flow analysis. If a 
toll charge is assumed, the cost charged is the total cost and profit FOB. 



19 



Table 22. — Electric power prices at selected 
aluminum smelters, 1 980 



Country 



Plant and/or utility 
location 



Price, 
U.S. cents/kWh 



Australia Portland smelter, 

Tomago project. 

Canada NA 

France NA 

Germany, Federal Republic of . . . . NA 

Japan NA 

Nonway NA 

United Kingdom NA 

United States Northwest, BPA . . . 

Southeast, TVA, . . . 

South and North 
Carolina 

New York, PASNY^ 



1.7-1.8 

1.2-1.3 

0.5 or less 

2.8 

2.0 minimum 

5.0 minimum 

1.0 

3.0 

0.9' 

2.7 

2.1-2.5 
0.5-0.8 



NA Not available. 

' Has subsequently been increased to 1 .5 to 2.1 cents/kWh. 
2 PASNY— Power Authority of the State of New York. 
Source: Commodities Research Unit, Ltd. (CRU). 



Dubai, which offer low-cost byproduct natural gas which is 
currently being flared off. 

Estimated total operating costs of aluminum production by 
country or region for producers and potential producers are 
shown in tables 23 and 24. The cost breakdowns shown, the 
result of the cost analysis performed on each operation 
during the course of this study, are presented, by country, on 
a weight-averaged basis. The assumed materials flows from 
mine to smelter shown in table A-1 are the basis of the costs 
presented. The salient statistic provided from tables 23 and 
24 is the percentage of total operating costs accounted for by 
refining and smelting. For both producers and potential 
producers, refining and smelting account for over 90 pet of 
total operating costs. Costs for aluminum smelting alone 
average 66 to 70 pet of the total operating costs of the 
producers and potential producers analyzed in this study. 
This statistic, underscoring the need to develop smelting 
capacity near sources of cheap energy, explains the shift of 
new smelter capacity to energy-rich countries. 



Table 23 Average operating costs of producing aluminum operations 

(All costs in U.S. cents per pound of primary aluminum in 1980 dollars) 



Bauxite origin 



Mine cost Mill cost 



Refinery Smelter Transport to refiner Royalty j . , . 

cost cost and/or smelter and/or levies 



Total cost minus 
byproduct credit 



Caribbean: 

Jamaica 

Others' 

Latin America: 

Brazil 

Guyana 

Suriname 

Europe: 

France 

Greece 

Turkey 

Asia: 

India 

Indonesia 

Oceania: 

Australia 

Africa; 

Guinea 

Other^ 

United States 

Other countries^ 

Average for market 
economy countries: 



1.0 


0.2 


1.0 


.1 


1.4 


1.2 


1.1 


3.9 


1.1 


1.5 


1.7 


.0 


1.2 


.2 


W 


W 


1.2 


.0 


W 


W 


.8 


.1 


.9 


1.0 


1.2 


.3 


3.0 


.0 


1.7 


.3 



13.9 
17.5 


49.9 
44.6 


15.6 
14.0 
16.5 


50.3 
50.5 
47.5 


18.5 

15.4 

W 


52.5 

54.1 

W 


13.9 
W 


23.0 
W 


15.9 


45.0 


16.5 
13.6 
13.9 
14.3 


51.7 
50.9 
51.2 
53.5 



1.0 



15.7 



49.3 



2.0 
3.3 

2.6 

2.1 
1.5 

1.5 
1.0 
W 

2.3 

W 

1.6 

2.9 

2.6 

.8 

.5 

2.1 



4.6 
4.9 

3.1 

.0 

3.6 

.0 
.0 
W 

.1 
W 



2.1 
.1 
.9 
.6 

1.7 



71.6 
71.5 

74.0 
71.6 
71.8 

74.2 

71.9 

W 

40.5 
W 

63.6 

75.1 
68.7 
69.9 
70.9 

70.7 



71.6 
71.5 

74.0 
64.3 
69.5 

74.2 

71.9 

W 

40.5 
W 

63.5 

63.8 
68.7 
69.9 
70.9 

66.7 



W Withheld to avoid disclosing individual deposit data; included as "Other countries.' 
' Includes the Dominican Republic and Haiti. 
^ Includes Ghana and Sierra Leone. 
^ Includes Indonesia and Turkey. 



Table 24 Estimated average operating costs of nonproducing (potential) aluminum operations 

(All costs in U.S. cents per pound of primary aluminum in 1980 dollars) 



Bauxite origin 



Mine cost Mill cost 



Refinery 
cost 



Smelter Transport to refiner 
cost and/or smelter 



Royalty 
and/or levies 



Total cost 



Total cost minus 
byproduct credit 



Caribbean; 

Jamaica 1.0 0.2 15.4 50.0 

Latin America; 

Brazil 1.0 1.1 17.9 45.6 

Other' 1.0 .4 14.7 49.9 

Asia: 

India .8 .0 18.2 44.7 

Indonesia W W W W 

Oceania; 

Australia .9 .2 9.6 49.3 

Solomon Islands W W W W 

Africa: 

Ghana .5 .1 14.6 47.9 

Guinea 1 .3 .0 25.7 43.9 

Other^ 1.0 .0 15.0 48.8 

Other countries^ 1 .7 .6 9.0 36.4 

Average for market 

economy countries: 1.1 .2 17.3 46.2 

W Withheld to avoid disclosing individual deposit data; included as "Other countries.' 
' Includes Costa Rica, French Guiana, Suriname, and Venezuela. 
^ Includes Cameroon, Malawi, and Sierra Leone. 
^ Includes Indonesia and the Solomon Islands. 



2.7 



3.4 



4.6 



1.8 



■73.9 



70.0 



73.9 



2.4 
1.3 


3.0 
.7 


71.1 
68.0 


70.9 
68.0 


2.3 

W 


.1 
W 


66.0 
W 


66.0 
W 


1.3 
W 


.4 
W 


61.7 
W 


61.7 
W 


1.9 
6.2 
5.3 
1.9 


.6 
1.9 
3.6 

.3 


65.6 
79.1 
73.9 
49.8 


. 65.6 
79.1 
73.9 
49.8 



70.0 



20 



RESOURCE-AVAILABILITY CURVES 



Once the cost data were determined, an economic 
analysis was performed for each operation. For aluminum 
operations not in production, all capital and operating cost 
estimates were expressed in January 1980 dollars. For 
producing operations, the undepreciated capital investment 
remaining in 1980 was calculated and all reinvestment, 
operating, and transportation costs were converted to 
January 1980 dollars. All costs for non-U. S. operations were 
converted to U.S. dollars based on foreign exchange rates, 
productivity factors, and inflation rates to reflect the U.S. 
dollar-equivalent cost of doing business within a foreign 
country. 

The Bureau of Mines has developed the Supply Analysis 
Model (SAM) to perform discounted cash-flow-rate-of-return 
(DCFROR) analyses to determine the price of the primary 
commodity required for an operation to obtain a specified 
rate of return on all of its investments (5). This determined 
value for the aluminum price is equivalent to the average total 
cost of production for the operation over its producing life 
under the set of assumptions and conditions (e.g., mine plan, 
full capacity production, and a market for all output) that are 
necessary in order to make an evaluation and is sometimes 
referred to as "incentive price". The DCFROR is most 
commonly defined as the rate of return that makes the 
present worth of cash flow from an investment equal the 
present worth of all after-tax investments (21, p. 232). For 
this study, a 15-pct DCFROR was considered the necessary 
rate of return to cover the opportunity cost of capital plus risk. 

Based on MAS methodology, all capital investments 
incurred 15 years before the initial year of analysis are 
treated as sunk costs. Capital investments incurred less than 
15 years before the initial year of the analysis have the 
undepreciated balances carried forward to that year, with all 
subsequent investments reported in constant 1980 dollars. 
This method generally results in a lower average total cost for 
currently producing operations since the undepreciated 
balance of capital investment for producing operations is 
generally much less than the capital investment required to 
develop new operations. 

A separate tax-records file maintained for each U.S. State 
and individual country contains the relevant fiscal parameters 
under which the mining firm would operate. This file includes 
corporate income taxes, royalties, severances taxes, and 
bauxite levies. These tax parameters are applied to each 
operation under evaluation with the implicit assumption that 
each bauxite deposit represents a separate corporate entity. 

The system also contains an additional file of worldwide 
economic indexes to update cost estimates for producing 
and nonproducing operations. 

Commodity-price tables are maintained for all byproducts 
and coproducts relevant to the availability analysis. In this 
study, the only assumed byproduct of aluminum production is 
calcined refractory bauxite, with a January 1980 price of 
$225 per ton. 

Detailed cash-flow values are generated for each prepro- 
duction and production year of an operation beginning with 
1980, the first year of the analysis. For each of the individual 
operations, an "incentive price" is determined at which a firm 
would generate sufficient revenues over the long run to cover 



full costs of the integrated operation, including a return on 
investment high enough to attract new capital (1). This 
represents the average total cost of mining bauxite from the 
individual deposit, including transportation costs to a refinery, 
refining costs, transportation costs to an aluminum smelter, 
smelting costs, and a 15-pct DCFROR on invested capital. 

Upon completion of the individual analyses, all operations 
included in the study were aggregated onto total and annual 
resource-availability curves. The total resource-availability 
curve is a tonnage-cost relationship that shows the total 
quantity of recoverable product potentially available at each 
operation's average total production cost including a 
stipulated rate of return. That is, the curve is an aggregation 
of the total potential aluminum that could be produced over 
the entire producing life of each operation, ordered from 
operations with the lowest average total cost of production to 
those with the highest. The curve provides a concise, 
easy-to-read, graphic analysis of the comparative costs 
associated with any given level of potential total output, 
together with an estimate of what the average long-run 
aluminum price (in January 1980 dollars) would likely have to 
be in order for a given tonnage to be potentially available. 

Certain assumptions are inherent in these curves: 

1. For all of the Jamaican deposits (and several other 
deposits), actual or estimated time schedules to develop the 
nonproducing operations were used; otherwise it was 
assumed that all nonproducing operations began develop- 
ment in 1980. 

2. All operations produce at full operating capacity 
throughout the life of the bauxite mine, and all output can be 
sold at a price that is equal to or greater than the average 
total production cost. 

3. Level of output for each operation (capacity) is 
assumed to remain constant over the entire producing life of 
the operation, except where planned expansions are known. 

4. All costs after January 1980 are expressed in January 
1980 dollars. No escalation of either costs or prices was 
included in the study. 

Annual curves are also presented in this report, and are 
constructed by disaggregating the total resource-availability 
curve on an annual basis. The assumptions inherent in the 
total resource-availability curve also apply for the annual 
curves. These curves reflect the time lags involved in 
achieving total production potential as well as the levels of full 
capacity output for each operation. Because of the 
tremendous bauxite reserves in the world, many deposits 
need not be developed for many years. Whenever possible, 
piublished estimates of the development schedules for 
nonproducers and planned expansions by producing opera- 
tions were utilized; in particular, the Jamaican Government, 
in order to plan the orderly growth of its bauxite industry, has 
provided a detailed plan of development for all of its known 
deposits. In most cases, however, published estimates of 
development schedules were not available; therefore, 
preproduction development was assumed to begin in 1980. 
This assumption leads to more potential aluminum produc- 
tion during the late 1980's than will likely appear, and the 
reader should keep this in mind when interpreting the annual 
curves presented later in this report. 



AVAILABILITY OF ALUMINUM FROM WORLD BAUXITE RESOURCES 



GENERAL 

This study analyzed potential aluminum production based 
upon the demonstrated resources of 91 bauxite mines and 



deposits in 22 market economy countries; of this resource, 
representing an in situ tonnage of 20.2 billion tons of bauxite, 
some 18.8 billion tons are considered to be minable, 
providing a production potential of 3.6 billion tons of primary 



21 



aluminum. The resource tonnage includes refractory-grade 
bauxite contained in 1 5 of the properties studied which have 
a production potential of 616 million tons of calcined 
refractory bauxite. In the analysis, the revenues generated 
from the production of calcined refractory bauxite are 
credited against the cost of producing primary aluminum. 



POTENTIAL TOTAL 
ALUMINUM PRODUCTION 

The potential production of aluminum based on the 
average total cost of production for each operation is 
illustrated in figure 3. The individual costs for aluminum range 
from about $0.47 per pound to $1.13. At a constant-dollar 
aluminum price of $1.13, a total of 3.6 billion tons of 
aluminum would potentially be available. With a price of 
$0.66 — equal to the producer price of aluminum in January 
1980 — some 470 million tons of aluminum would be 
available. This tonnage is approximately 37 times the actual 
primary aluminum production of market economy countries in 
1980 (10). At $0.75, 1.3 billion tons would be available; and 
at $0.85, about 3 billion tons would be available. Generally, 
the operations showing an average total cost of less than 
$0.75 are currently producing, whereas the higher cost 
operations are not yet in production. Estimated average total 
costs for producing and potential operations are illustrated in 
table 25; the average total cost of aluminum production for all 
producers on a weight-averaged basis is $0.70 per pound, 
whereas the average for nonproducers is $0.84. This 
differential is largely accounted for by the huge capital 



investments, particularly in infrastructure and refining and 
smelting capacity, required to bring nonproducing operations 
into production. 

The total resource-availability curve can be disaggregated 
to illustrate potential aluminum production from the ore of 
each of the six major bauxite-producing regions. No curve 
was constructed for the United States, since the three U.S. 
mines included in the study account for only 8.5 million tons 
of potential aluminum production. 



1.20 



1 1 1 1— 

Costs include o 15-pcT rate ot return 

on ail investments 
January 1980 dollars 



500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 

TOTAL POTENTIAL ALUMINUM, million rtietric tons 

Figure 3. — Total potential aluminum produc- 
tion from bauxite resources in market economy 
countries. 



Table 25. — Potential aluminum production and average total cost for producing and potential 
operations in market economy countries 



Producing operations 



Potential operations 



Bauxite source 



Potential Al production, 
thousand tons 



Average total cost, 

U.S. dollars per pound 

(weight averaged) 



Potential Al production, 
thousand tons 



Average total cost, 

U.S. dollars per pound 

(weight averaged) 



Caribbean: 

Jamaica 

Others^ 

Total 

Latin America: 

Brazil 

Guyana 

Others^ 

Total 

Europe: 

France 

Greece 

Turkey 

Total 

Asia: 

India 

Indonesia 

Total 

Oceania: 

Australia 

Solomon Islands 
Total 

Africa: 

Guinea 

Others^ 

Total 

United States 

Other countries" 

Total 



144,692 
6,303 


0.73 
.75 


245,522 


0.79 




150,995 


.73 


245,522 


.79 




156,139 
104,047 
109,573 


.78 
.66 
.70 


182,624 
97,589 


.77 
.81 




369,759 


.72 


280,213 


.78 




3,449 
135,302 
W 


.75 
.77 
W 


— 


— 




138,751 


.77 


— 


— 




17,972 
W 


.50 
W 


181,407 
W 


.80 
W 




17,972 


.50 


181,407 


.80 




349,105 


.70 


371,721 
W 


.83 
W 




349,105 


.70 


371,721 


.83 




454,329 
15,721 


.66 
.75 


609,643 
288,171 


.84 
.88 




470,050 


.67 


897,814 


.86 




8,535 
15,963 


.71 
.86 


141,815 


.97 





1,521,130 



.70 



2,118,492 



.84 



W Withheld to avoid disclosing individual operation data; included as "Other countries." 

— indicates or negligible. 

' Includes the Dominican Republic and Haiti. 

^ Includes Costa Rica, French Guiana, Suriname, and Venezuela. 



22 



The Caribbean 

Figure 4 shows potential aluminum production from 
bauxite in the Dominican Republic, Haiti, and Jamaica. Total 
potential aluminum production from the bauxite in these 
countries amounts to about 397 million tons, 38 pet from 
producing operations and 62 pet from potential producers. 
Total production costs range from $0.59 to $0.85 per pound, 
with an average of $0.73 for producers and $0.79 for 
potential producers. 



85- 



75- 



.60 



Cos's ■iciude 15-pcT rare o* teTurn 

on oil investments 
jonuoiy 1980 dollars 



.r 



50 100 150 200 250 300 350 400 450 

TOTAL POTENTIAL ALUMINUM, million metric tons 

Figure 4. — Total potential aluminum produc- 
tion from Caribbean bauxite. 



Latin America 



5 shows potential aluminum production from 
Brazil, Costa Rica, French Guiana, Guyana, 



Figure 
bauxite in 

Suriname, and Venezuela. Total potential aluminum produc- 
tion from bauxite in these countries is about 650 million tons, 
57 pet from producing operations and 43 pet from potential 
producers. Total production costs range from $0.64 to $1 .02 
per pound, with an average of $0.73 for producers and $0.79 
for potential producers. 



Costs include o 15- pet rote of return 

on all investments 
January 1980 dollars 



_H" 



100 200 300 400 500 600 700 

TOTAL POTENTIAL ALUMINUM, million metric tons 

Figure 5. — Total potential aluminum produc- 
tion from Latin American bauxite. 



Europe 

Figure 6 shows potential aluminum production from 
bauxite in France, Greece, and Turkey. Total potential 



aluminum production from the bauxite in these countries 
amounts to 143 million tons, all from producing operations. 
Total production costs range from $0.72 to $0.79 per pound, 
with an average of $0.77 per pound. 



Costs include a 15-pct rate of return 
on all investments 
_ January 1980 dollors 



T 



/ 



20 40 60 80 100 120 140 I6( 

TOTAL POTENTIAL ALUMINUM, million metric tons 

Figure 6. — Total potential aluminum produc- 
tion from European bauxite. 



Asia 

Figure 7 shows potential aluminum production from 
bauxite in India and Indonesia. Total potential aluminum 
production from the bauxite in these countries amounts to 
343 million tons, 9 pet from producing operations and 91 pet 
from potential producers. Total production costs range from 
$0.47 to $1.11 per pound, with an average of $0.65 for 
producers and $0.87 for potential producers. 





I.IO 


■n 




=3 


inn 






CL 








<U 






.yo 






o 




o 


.80 


1— 




(J) 




o 


7n 






_J 




<n 




*- 


hi; 


o 





Costs include a 15-pct rote of return 

on all investments 
Januory 1980 dollars 



r 



40 80 120 160 200 240 280 320 360 

TOTAL POTENTIAL ALUMINUM, million metric tons 

Figure 7. — Total potential aluminum produc- 
tion from Asian bauxite. 



Oceania 

Figure 8 shows potential aluminum production from 
bauxite in Australia and the Solomon Islands. Total potential 
aluminum production from the bauxite in these countries 
amounts to about 731 million tons, 48 pet from producers and 
52 pet from potential producers. Total production costs range 
from $0.66 to $1 .13 per pound, with an average of $0.70 for 
producers and $0.83 for potential producers. 



23 



1,00 



.60 



Costs include a 15-pcT rate ot return 

on all investments 
January 1980 dollors 



100 200 300 400 500 600 700 800 

TOTAL POTENTIAL ALUMINUM, million metric tons 



Figure 8. — Total potential aluminum produc- 
tion from bauxite in Oceania. 



Africa 

Figure 9 shows potential aluminum production from 
bauxite in Cameroon, Ghana, Guinea, Malawi, and Sierra 
Leone. Total potential aluminum production from the bauxite 
in these countries amounts to 1 .368 billion tons, 34 pet from 
producers and 66 pet from potential producers. Total 
production costs range from $0.61 to $1 .01 per pound, with 
an average of $0.67 for producers and $0.86 for potential 
producers. 



1.05 
1.00 
.95 
.90 
,85 
,80 
.75 
.70 
.65 
.60 
.55 
.50 



-1 r 



Costs include a 15-pct rate ot return 

on all investments 
Januory 1980 dollars 



r^- 



200 400 600 800 1,000 1,200 

TOTAL POTENTIAL ALUMINUM, million metric tons 



Figure 9. — Total potential aluminum produc- 
tion from African bauxite. 



POTENTIAL ANNUAL 
ALUMINUM PRODUCTION 

Another method of illustrating aluminum availability is to 
disaggregate the total resource-availability curve and show 
potential production on an annual basis. Figure 10 shows the 
potential annual production of aluminum at selected cost 
levels between the years 1980 and 2000. The curves are 
based on current and estimated production capacities for 
producing and potential operations. Also reflected in the 
curves are estimates of capacity expansions of existing 
operations (when published expansion plans were available) 
and development schedules for nonproducers. The develop- 



ment schedule reflects the time lag inherent in developing 
"greenfield" mining, refining, and smelting capacity. This 
study does not take into account possible further delays 
caused by environmental, legal, fiscal, financial, market, or 
other problems. With the exception of deposits in Jamaica, 
where the Jamaican Government provided estimated de- 
velopment plans and several other deposits where actual 
development plans were known, all the nonproducing 
operations were assumed to begin preproduction develop- 
ment in 1980. 

Potential aluminum production on the annual curve 
increases substantially during the 1980's but remains 
relatively flat from 1990 through 2000, largely because of the 
assumptions underlying the curve. The assumption of 
preproduction beginning in 1980 for nonproducers causes 
potential production capacity to increase dramatically during 
the mid-1 980's. Furthermore, the assumption that capacities 
remain constant (with a few exceptions) throughout the life of 
the operation makes output constant throughout the 1 990's. 
In reality, production capacities of existing bauxite mines can 
generally be expanded at a much lower cost than that for 
developing new bauxite operations. Significant expansion of 
existing bauxite mines, however, would be the result of 
concomitant expansion of existing refining and smelting 
capacity or the development of new refining and smelter 
capacity to process the bauxite into aluminum. Thus, the 
quantity of potential aluminum production is probably 
overstated for the mid-1 980's and the estimates of produc- 
tion potential through the 1990's may be conservative. 
However, the costs of achieving new production potential, 
either from the expansion of existing capacity or from the 
development of "greenfield" operations (in January 1980 
dollars), are accurately reflected in the curves based on the 
cost analyses performed for this study. The cost of 
developing new refining and smelting capacity for the 
potential operations analyzed in this study is basically the 
same as would be incurred in developing new refining and 
smelting capacity to process additional bauxite from existing 
operations. 

A gradual expansion of aluminum production potential is 
illustrated in figure 10. At a production cost of $0.75, 
potentially recoverable aluminum increases from slightly less 
than 14 million tons in 1981 to 17 million tons in 1985 and 19 
million tons in 1990. At $1.15, the amount of potentially 
recoverable aluminum increases from about 17 million tons 
in 1981 to approximately 44 million tons in 1990. If demand 
for primary aluminum continues to increase at rates of 4 to 6 
pet annually, however, the market economy countries will 
require annual production between 30 and 40 million tons of 



40 



r ' I I I I I I I I 

Alummum pioducrion costs ore in Jan. 1980 dollars/pound 

$1.15 

/ %^m ~ 




1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 
YEAR 

Figure 10. — Potential annual aluminum pro- 
duction from bauxite resources in market eco- 
nomy countries at various cost levels including a 
15-pct DCFROR. 



24 



primary aluminum in the year 2000. Based on the results of 
the analysis illustrated in figure 10, a net increase in the real 
price of aluminum will be needed as an incentive for the 
development of sufficient refinery and smelter capacity to 
satisfy demand, irrespective of whether the bauxite source is 
from the expansion of existing mines or from the develop- 
ment of new ones. A real price of at least $0.85 per pound (in 
January 1980 dollars) would be required, mainly because of 
rising construction and energy costs and the high cost of 
capital. If aluminum prices continue at low levels, a tight 



market situation could occur before the end of the century. 
Any shortfalls of aluminum supply would not be caused by a 
lack of bauxite resources, but rather by a lack of growth in 
smelting and refining capacity. 

Ironically, an Industry that has been plagued with 
overcapacity throughout the 1970's could face future 
shortfalls of capacity. However, even in booming Australia, 
five of six planned smelter projects have been put on hold, 
largely because of uncertainties concerning the availability or 
cost of electric power (6, p. 16). 



CONCLUSIONS 



The demonstrated resources of bauxite ore contained in 
the 91 deposjts analyzed in this study amount to approx- 
imately 20.2 billion tons, out of a total identified bauxite 
resource of roughly 31.9 billion tons in market economy 
countries. From this demonstrated resource, an estimated 
3.6 billion tons of primary aluminum is recoverable. The 
analyses indicate that at a long-run aluminum price of $1 .13 
per pound (in January 1980 dollars), all this aluminum is 
potentially available. At $0.75 per pound, an estimated 1.3 
billion tons of aluminum is potentially available; at $0.85 
about 3 billion tons of aluminum would be available; and $1 
could bring potential production of slightly under 3.6 billion 
tons. In January 1980 dollars, the average total cost of 
production (on a weight-averaged basis) for producing 
operations is $0.70 per pound of aluminum; for potential 
producers the average is $0.84. Bauxite mining, milling, and 
levies (also on a weight-averaged basis) account for slightly 
over 6 pet of the total operating cost of aluminum production. 
Alumina refining accounts for 22 pet of the total operating 
cost, transportation accounts for about 3 pet, and aluminum 
smelting accounts for over 69 pet. Refining and smelting 
costs, on average, amount to over 90 pet of the total 
operating cost of aluminum production. 

Demonstrated resources of bauxite are sufficient to serve 
as the source of primary aluminum well into the next century. 
Also, as new bauxite deposits are discovered, and as bauxite 



deposits with tonnage estimates at the identified resource 
level are further explored, they will be included as reserves, 
significantly increasing future availability of bauxite. Any 
improvement in refining technology that would make 
low-grade bauxites economic would increase bauxite re- 
serves even further. Furthermore, bauxite is widely distri- 
buted geographically, lessening the risks of dependence on 
imported sources. 

About 12 million tons of aluminum was potentially available 
in 1980 at a total production cost of $0.75 per pound, an 
output very close to the actual Western Worid production in 
1980 of 12.6 million tons. With the same criterion of $0.75, 
approximately 17 million tons of aluminum could be 
potentially available in 1985, and almost 19 million tons could 
be available in 1990. Assuming continued growth in demand 
for aluminum, a tight market situation could develop during 
the 1990's, unless the real price of aluminum increases 
enough to stimulate the massive new investments required to 
develop new mining, refining, and smelting capacity. Any 
possible shortfalls of aluminum supply would be due not to a 
lack of bauxite resources, but mainly to a lack of growth in 
refining and smelting capacity. This study indicates that the 
real price of aluminum would have to be $0.85 per pound (in 
January 1980 dollars) before 1990 to attract the required 
investments and provide aluminum companies with a 
sufficient rate of return on invested capital. 



25 



REFERENCES 



1. Arthur D. Little, Inc. Economic Impact of Environmental 
Regulations on the United States Copper Industry. Rept. to the U.S. 
Environmental Protection Agency, Contract 68-01-2842, January 
1978; reproduced and distributed by the American Mining Congress, 
Washington, D.C. 

2. Austrilian Mineral Economics Pty. Ltd. The World Aluminum 
Industry, Sydney, Australia, v. 1, 1981, 410 pp. 

3. Charles River Associates Inc. Policy Implications of Producer 
Country Supply Restrictions: The World Aluminum/Bauxite Market. 
Cambridge, Mass., 1977, 262 pp. 

4. Clarfleld, K., S. Jackson, J. Keefe, M. Noble, and A. Ryan. 
Eight Mineral Cartels: The New Challenge to Industrialized Nations. 
Metals Week, 1975, 177 pp. 

5. Davidoff, R. L. Supply Analysis Model (SAM): A Minerals 
Availability System Methodology. BuMines IC 8820, 1980, 45 pp. 

6. Economist (London). Australia Economy Survey. Oct. 31 -Nov. 
6, 1981, 32 pp. 

7. International Bauxite Association. Quarterly Review. V. 5, Nos. 
2-3, December 1979-Mar. 1980, 52 pp. 

8. Quarterly Review. V. 5, No. 4, June 1980, 39 pp. 

9. Quarterly Review. V. 6, No. 2, October-December 

1980, 46 pp. 

10. Quarterly Review. V. 6, No. 3, January-March 1981, 

47 pp. 
11. Quarterly Review. V. 7, No. 2, October-December 

1981, 46 pp. 

12. Kurtz, H. F., and L. H. Baumgardner. Aluminum. Ch. in 
Mineral Facts and Problems, 1980 Edition. BuMines Bull. 671, 1981, 
pp. 9-34. 

13. Malenbaum, W. World Demand for Raw Materials in 1985 and 
2000. McGraw-Hill Book Co., Inc., New York, 1978, 126 pp. 

14. Metal Bulletin Ltd. World Aluminum Survey 1977. London, 
1978, 199 pp. 



15. Patterson, S. H. Aluminum From Bauxite: Are There 
Alternatives? Am. Scientist, v. 65, No. 3, May-June 1977, pp. 
345-354 

16. Patterson, S. H., H. F. Kurtz, C. L. Neeley, and J. C. Olson, 
World Aluminum Resources — Bauxite. U.S. Geol. Survey Profes- 
sional Paper, manuscript in preparation, a draft copy is available for 
consultation at the Minerals Availability Field office, Bureau of Mines, 
Denver, Colo. 

17. Peterson, G. R. The International Bauxite Association and Its 
Implications for the Aluminum Industry. M.S. Thesis, Colorado 
School of Mines, Golden, Colo., 1980, 181 pp. 

18. Peterson, G. R., R. L. Davidoff, D. I. Bleiwas, and R. J. Fantel. 
Alumina Availability — Domestic, A Minerals Availability System 
Appraisal. Bumines IC 8861, 1981, 23 pp. 

19. Radetzki, M. Market Structure and Bargaining Power. 
Resources Policy (Guildford, Surrey, U.K.), June 1978, pp. 1 15-125. 

20. Stamper, J. W., and H. F. Kurtz. Aluminum. BuMines Min. 
Commodity Profiles, 1978, 29 pp. 

21 . Stermole, F. J. Economic Evaluation and Investment Decision 
Methods. Investment Evaluations Corp., Golden, Colo., 1974, 443 
pp. 

22. STRAAM Engineers Inc. Capital and Operating Cost Estimat- 
ing System Manual for Mining and Beneficiation of Metallic and 
Nonmetallic Minerals Except Fossil Fuels in the United States and 
Canada. Submitted to the BuMines under Contract No. JO255026, 
December 1977, 374 pp., available from the BuMines, Minerals 
Availability Field Office, Denver, Colo. 

23. U.S. Bureau of Mines. A Dictionary of Mining, Mineral, and 
Related Terms. 1968, 1269 pp. 

24. U.S. Geological Survey. Principles of a Resource/Reserve 
Classification for Minerals. U.S. Geol. Survey Circ. 831, 1980, 5 pp. 

25. Wilson, L. L. Aluminum — Bright Spot in the Economy. Min. 
Cong. J., V. 65, No. 12, December 1979, pp. 33-36. 



26 



APPENDIX A. — TABLES 
Table A-1 . — Assumed location of refineries and smelters for the study 



Deposit 



Status 



Location of refinery Percentage to eacfi 
refinery 



Location of smelter 



Percentage to eacfi 
smelter 



AUSTRALIA 



Aurukun . 



Cape Bougainville . . 
Chittering (Muctiea) . 
Gove 



. Nonproducer . 

do. 

do. 



. Australia 



, Producer . 



Huntly-Del Park 
Jarratidale 



.do. 
.do. 



Mitchell Plateau Nonproducer 



do. 

do. 

. Australia . . . . 

U.S 

W. Germany . 

. Australia 

do. 



do. 



Mount Saddleback 

Wagerup (Mount William). 
Weipa 



.do. 
.do. 



do. 
do. 



. Producer . 



. Australia 

Italy 

Japan. . . 



100 

100 

100 

50 
25 
25 

100 
100 

100 

100 

100 
43 
40 
17 



{ 
{ 



Holland 

Korea 

U.S 

Japan 

Japan 

Europe 

U.S 

Iceland 

South) Africa . 
Australia . . . . 

do. 

Australia . . . . 

U.S 

Japan 

Europe 

U.S 

Japan 

Australia . . . . 
Australia . . . . 

Italy 

Japan 



50 
50 
50 
50 

100 
25 
25 
25 
25 

100 

100 
50 
20 
20 
10 
50 
50 

100 
43 
40 
17 



BRAZIL 



Almerim-Jutai Para Nonproducer 



Ouro Preto. . . 

Paragominas. 



Pocos De Caldas 

Pocos De Caldas-Alcominas . 



. Producer .... 
. Nonproducer 

. Producer. . . . 



.do. 



Trombetas-Alcoa 
Trombetas-MRN. 



. Nonproducer 
. Producer. . . . 



. Brazil 

U.S.-CSnada. 

. Brazil 

. Brazil 

U.S.-Canada. 

. Brazil 

. Brazil 

U.S 

. Brazil 

. Canada 



50 
50 

100 
30 
70 

100 
86 
14 

100 

100 



Brazil 

U.S.-Canada. 

Brazil 

Brazil 

U.S.-Canada. 

Brazil 

Brazil 

U.S 

Brazil 

Canada 



Blanquette-Combecave. . 

Cannonnettes 

La Roquette-Montplaisir . 

Mazauges (Var) 

Pegros (Var) 

St. Julien-Tourves 



. Producer France . 

do 

do 

do 

do 

do 



do. 
do. 
do. 
do. 
do. 



100 
100 
100 
100 
100 
100 



France . 



do. 
do. 
do. 
do. 
do. 



50 
50 

100 
30 
70 

100 
86 
14 

100 

100 



BRITISH PACIFIC ISLANDS 


Rennel Island 

Wagina Island 


Nonproducer 

do 


Rennel Island 

Japan 


100 
100 


Japan 

do 


100 
100 


CAMEROON 


Minim Martap 


Nonproducer 


Cameroon 

France 


34 
66 


Cameroon 

France 


34 
66 


COSTA RICA 


San Isidro Del General 


Nonproducer 


Costa Rica 


100 


Costa Rica 


100 








DOMINICAN REPUBLIC 


Cabo Rojo 


Producer 


U.S 


100 


U.S 


100 


FRANCE 



100 
100 
100 
100 
100 
100 



FRENCH GUIANA 



Kaw Mountains Nonproducer 



. Suriname. 



100 



U.S. 



100 



GHANA 



Atewa (Kibi). 
Awaso 



, Nonproducer 
. Producer 



. Europe . 

Ghana . 

.U.K. ... 



Nyinahin Nonproducer 



W. Germany. 

Spain 

. Ghana 

Europe . 



41.2 

58.8 

34 

33 

33 

27.5 

72.5 



} 



Europe . 
Ghana . 

Ghana . 

Europe. 



Aye Koye 

Dabola Mine 

Debele (Kindia). . . 

Fria 

Sangaredi (Soke). 
Tougue 



. Nonproducer . 

do. 

do. 

. Producer 

do. 

. Nonproducer . 



.Guinea 

Europe 

.Guinea 

Europe 

. Europe-USSR 

.Guinea 



, U.S. . . . 

Europe . 
.Guinea. 

Europe. 



37.8 
62.2 
47.6 
52.4 
100 

100 

74 
26 
14 
86 



Guinea. . . . 
Europe .... 

Guinea 

Europe 

Yugoslavia 

Europe 

Europe 

Cameroon . 

U.S 

Europe 

Guinea 

Europe 



62.4 
37.6 

100 

100 











GREECE 












Eleusis 

Hellkon 

Itea 

Parnasse 


Producer 

do 

do 

do 


Greece. 


. do. 
. do. 
. do. 




100 
100 
100 
100 


Greece. 
Europe. 


do'.'.'.'.'.'.'.'.'. 
do 


100 
100 
100 
100 




GUINEA 



6.6 
93.4 
13.7 
86.3 
50 
50 
80 
20 
74 
26 

8.1 
91.9 



27 



Table A-1 . — Assumed location of refineries and smelters for the study — Continued 



Deposit 



Status 



Location of refinery Percentage to each 
refinery 



Location of smelter 



Percentage to each 
smelter 



GUYANA 



Arrowcane East Producer. 



. Guyana 



Arrowcane South do. 



do. 



CoofDacka 

East Mombaka . 



East Montgomery. 
ItunI District 



Kara Kara 
Manaka . . 



West Bank #3 . 
West Mombaka 



.do. 
.do. 

.do. 
.do. 

.do. 
.do. 

.do. 
.do. 



do. 



. U.S 

Europe. 
Japan . . 

. Guyana 



100 



100 



100 

34 
33 
33 

100 



. Guyana . 

U.S 

Europe. . 

. Guyana 



38 1 
31 > 
31 J 



. U.S 

Europe. 
Japan . . 

. Guyana 



Yararlbo do. 



.US. ... 

Europe. 

Japan. . 
. U.S. . . . 

Europe . 

Japan . . 



100 

34 
33 
33 

100 

34 
33 
33 
34 
33 
33 



{U.S 
Europe 
Venezuela. . . 
{U.S 
Europe 
Venezuela. . . 

f Europe 

l Venezuela... 

U.S 

Europe 

Japan 

{U.S 
Europe 
Venezuela. . . 

U.S 

Europe 

r U.S 

■i Europe 

L Venezuela... 

U.S 

Europe 

Japan 

r U.S 

■s Europe 

L Venezuela... 

U.S 

Europe 

Japan 

U.S 

Europe 

Japan 

U.S 

India 

U.S.S.R 

India 

do. 

U.S.S.R 

India 

do. 

do. 

Japan 

Indonesia . . . 

{U.S.-Canada. 
Europe 
Ghana 
Venezuela. . . 

/ U.S 

I Europe 

r U.S.-Canada. 

J Europe 

I Ghana 

L Venezuela... 

Canada 

do. 

U.S 

do. 

U.S 

r U.S 

■i Europe 

L Venezuela... 

Canada 

U.S 

U.S 

{U.S 
Europe 
Venezuela. . . 

U.S 

/ U.S 

I Europe 

Malawi 

f Europe 

l Canada 

Europe 

Canada 



76 
21 

3 
76 
21 

3 
50 
50 
34 
33 
33 
76 
21 

3 
50 
50 

76 
21 

3 
34 
33 
33 
76 
21 

3 
34 
33 
33 
34 
33 
33 



HAITI 



Miragoane Producer. 



U.S. 



100 



100 



INDIA 



Amarkantak 

Anantagiri 

Bagru Hills 

Chandgad 

Chintaplee. 

Gandhamardan. 

Lohardaga 

Panchpatmali . . 



, Producer 

, Nonproducer . 

, Producer 

do. 

, Nonproducer . 

do. 

, Producer 

, Nonproducer . 



. India. . . . 
.U.S.S.R. 
. India 



do. 
do. 
do. 
do. 
do. 



100 
100 
100 
100 
100 
100 
100 
100 



100 
100 
100 
100 
100 
100 
100 
100 



INDONESIA 



Bintan Island. 
Singakawang 



, Producer .... 
. Nonproducer 



. Japan 

. Indonesia 



100 
100 



100 
100 



JAMAICA 



Alpart 

Breadnut Valley 
Cambridge 



, Producer Jamaica 

do do. 



. Nonproducer do . 



Ewarton 

Kirkvine 

Lydford 

Maggotty 

New Market East . 



. Producer Jamaica. 



.do. 
.do. 



do. 



U.S. 



. Temporary shutdown . 
. Nonproducer 



Samaico do. 



.U.S. 
.Jamaica. 



do. 



Schwallenburgh West . 
Spanish Town West . . 
Trelawny 



.do. 
.do. 
.do. 



.Jamaica. 
. U.S 



Trelawny Central do. 



Water Valley 

Williamsfleld East. 



, Producer 

, Nonproducer 



. U.S 

.Jamaica. 

. U.S 

.Jamaica. 



100 
100 
100 



100 
100 
100 
100 
100 

100 

100 
100 
100 

100 

too 

100 



52.2 

30.3 
8.0 
9.5 

50 

50 

52.2 

30.3 
8.0 
9.5 
100 
100 
100 
100 
100 

34 

33 

33 
100 
100 
100 

34 

33 

33 
100 

50 

50 



MALAWI 



Mulanje Mountain Nonproducer 



. Malawi . 



100 



100 



SIERRA LEONE 



Moyamba. 
Port Loko . 



. Producer 

. Nonproducer 



. Sierra Leone. 

. U.S 

Sierra Leone. 



100 

43 
57 



45 
45 
45 
55 



28 



Table A— 1. — Assumed location of refineries and smelters for the study — Continued 



Deposit 



Status 



Location of refinery Percentage to eacfi 
refinery 



SURINAfvIE 



Location of smelter Percentage to each 
smelter 



Bakhuis Mts. 
Moengo ... 



. Nonproducer 
. Producer .... 



Leiyborp 

Onverdacht 



.do. 
do. 



Suriname. 
, Suriname. 

US 

. Suriname. 

US 

. US 

Suriname. 



100 
50 
50 
75 
25 
52 
48 



US 

Suriname. 

U.S 

Suriname. 

U.S 

US 

Suriname. 



100 
50 
50 
75 
25 
52 
48 



TURKEY 


Seydisehir 


Producer 


Turkey . , . 




100 


Turkey 


100 




UNITED STATES 


Alcoa Bauxite 

Quapaw Bauxite 

Reynolds Bauxite 


Producer 

do 

do 


U.S 

US 

US 




100 
100 
100 


U.S 

US 

US 


100 
100 
100 




VENEZUELA 


Los Pijiguaos 


Nonproducer 


Venezuela 




100 


Venezuela 


100 











Table A— 2. — Capital costs of alumina refineries 



Country 


Location 


Type' 


Capacity, thousand 
tons 


Cost,^ million U.S. 
dollars 


Year^ 


Cost per annual ton of 
capacity, U.S. dollars 


SOUTH AfylERICA 


Brazil 

Venezuela 


Belem 

fylantanzas 


N 
N 


800 

1,000 


409 
650 


1978 
1979 


511 

650 


CARIBBEAN 


Jamaica 

Do 

Virgin Islands 


N/lanchester 

Clarendon 

St. Croix 


N 
E 
E 


600 
550 
550 


500 
350 
350 


1980 
1980 
1979 


636 
636 
636 


AUSTRALIA 


Queensland 

Western Australia 

Do 

Do 


Gladstone 

Pinjarra 

Wagerup 

Worsiey 


E 
E 
N 
N 


350 
300 

500 
1.000 


242 

33 

427 

1,000 (a) 


1980 
1980 
1980 
1980 


692 

110 

854 

1,100 


EUROPE 



Greece Distomon 

Greece Gulf of Corinth 

Ireland Aughinish 

Italy Portoscuso ... 

Norway Mongstad 



E 


100 


120 


1980 


1,200 


N 


600 


600 


1980 


1,000 


N 


800 


700 


1979 


870 


E 


720 


670 


1980 


930 


N 


350 


244 


1979 


697 


ASIA 


N 


800 


861 (b) 


1979 


1,077 


N 


300 


258 (b) 


1979 


861 


N 


500 


600 


1979 


1,200 


N 


600 


502 


1979 


836 


N 


500 


325 


1978 


650 


N 


' 800 


500 


1979 


625 



India Orissa 

Do Kutch 

Iran Teheran 

Indonesia Kuala Tanjung 

Do Kalimantan . . . 

Philippines Mindanao 



AFRICA 



Guinea Friguia . . . 

Guinea Aye Koye . 

Ghana Kibi 



350 

2,000 

600 



350 
1 ,200 (b) 

240 (b) 



1978 
1978 
1978 



1.000 
600 
400 



'N — new plant: E — expansion of existing plant 

^a — includes cost of new mine: b — includes cost of mine development 

^ Year in which cost information announced. 

Note. — In North America, the proposed Alumet refinery is to process alunite rather than bauxite: capital cost is $920 per ton of new capacity. 

Source: Commodities Research Unit, Ltd. (CRU). Data compiled from various publications. 



29 



Table A— 3. — Capital costs off aluminum smelters — new (N) and expansion (E) projects 



Plant location 



Nor E 



Capacity, tpy 



Total cost, million U.S. dollars 



Unit cost per annual ton 



NORTH AMERICA 



La Bale, Canada N 57,000 100 ( 

Mount Holly, U.S.A N 180,000 400 ( 

Sebree, U.S.A E 54,000 97 ( 

Tabor City, U.S.A N 181,000 400 ( 


1979) $1,754 
1979) 2,200 

1979) 1,796 

1980) 2,210 


EUROPE 


St. Jean De Maurienne, France' N 27,000 45.8 

Inwerk West Germany E 16,000 89.6 ( 


1979) 1,698 
1978) 5,601 

1978) 1,836 

1979) 4,293 
1979) 2,764 
1979) 1,655 
1979) 2,007 
1978) 2,378 


Ardal, Norway E 32,000 58.7 ( 

Hoyanger, Norway^ E 46,000 1 97.5 

Karmoy, Norway E 50,000 1 38.2 

San Ciprian, Spain^ N 1 80,000 298 ( 

Lochaber, U.K N 37,000 74.3 ( 

Mostar, Yugoslavia N 90,000 214 


AUSTRALIA AND NEW ZEALAND 


Farley, Australia N 236,000 700 

Gladstone, Australia (Alcan) N 100,000 290 

Gladstone, Australia (Gladstone Aluminum) . . N 206,000 700 

Kurri Kurri, Australia E 22,500 45 

E 45,000 107 
Port Henry, Australia E 57,000 96 


1980) 2,966 

1979) 2,900 

1980) 3,398 
1979) 2,000 
1979) 2,378 
1979) 1,684 

1979) 3,292 

1980) 2,666 


Bluff New Zealand E 75 000 200 




SOUTH AMERICA 


Belem, Brazil N 320,000 960 (1978) 3,000 

Saramenha, Brazil E 28,000 90 (1979) 3,214 

Sepetiba Bay, Brazil N 85,000 370 (1979) 4,353 

Vera Cruz, Mexico E 45,000 56 (1978) 1,244 

Puerto Ordaz, Venezuela E 70,000 1 60 (1 978) 2,286 

San Felix, Venezuela N 280,000 715 (1979) 2,555 


MIDDLE EAST AND FAR EAST 


MSila, Algeria N 127,000 375 

Alba, Bahrain E 45,000 120 

Jebelali, Dubai" N 135,000 1,000 

Hirakud, India E 34 000 76 3 


1979) 2,953 

1979) 2,667 

1980) 7,407 
1980) 2,244 
1980) 5,454 
1980) 10,222 

1979) 8,888 

1980) 5,714 
1980) 3,857 
1978) 1,193 


Orissa, India ... N 220 000 1 200 


Kuala Tanjung, Indonesia N 225,000 2,300 

Oraco City, Philippines N 70,000 400 

Mindanao, Philippines N 140,000 540 

Kaohslung, Taiwan N 14,000 16.7 



' Replacing old smelter by a new smelter. 

^ Includes new powerplant. 

^ Part of integrated complex, 40 pot of capital cost. 

" 49 pet smelter, rest: power plant, desalination complex. 

Source: Commodities Research Unit, Ltd. (CRU). Data compiled from various publications. 



Table A— 4. — Mines and deposits Investigated but not included in this study 



Location and name Comments 

Angola: Luanda Small resource. 

Australia: 

Gidgiegannup Do. 

Mirboa North Do. 

Moss Vale Do. 

Brazil: 

Carajas Resource not delineated yet at the 

demonstrated level. 

Serra do Acapuzal All refractory grade. 

Serra do Almeirim Do. 

Cameroon: 

Fongo Tongo Tonnage is inferred. 

Ngadundal Do. 

Chile: Bio Bio Resource is high-alumina 

clay — not bauxite. 

Colombia: Popayan-Cali Tonnage is inferred. 

Fiji: Vanna Levu Island No information available. 

France: 

Le Recoux Small tonnage — almost depeleted. 

Maran-Pereille Reserves depleted. 

Greece: 

Elaion Mine No information available. 

Fiorina Refractory grade only. 

Guyana: Blue Mountains Inferred resource only. 

Hungary: 

Bakonys Zentlaszho Cost data not reliable. 

Fejer Do. 

Fenyofo Do. 

Italy: 

San Guovanni Small reserves. 

Save. Do. 



Location and name Comments 

Madagascar: Manantenina Inferred resources only 

Malaysia: 

SE Jahore-Pengerang Small reserves. 

Telok Ramunia Reserves depleted 

Mali: Bamako Inferred resources only. 

Turkey: Milas Refractory bauxite. 

Venezuela: 

Delta Amacuro Raw prospect. 

Nuria Plateau Do. 

Serrania De los Guaicos Do. 

Yugoslavia: 

Bosanska Krupa Cost data not reliable. 

Bracan Do. 

Cetinje Do. 

Jajce Do. 

Jesenica Do. 

Klina Do. 

Krusevo Do. 

Mostar Do. 

Niksic Do. 

Obrovac Do. 

Ornis Do. 

Posusje Do. 

Pristina Do. 

Rovinji Do. 

Sumarnic Do. 

Vlasencia Do. 

Zadar Do. 

Zaton Do. 



30 



APPENDIX B.— GEOLOGY OF SELECTED DEPOSITS IN MAJOR 
BAUXITE-PRODUCING REGIONS 



AUSTRALIA 



BRAZIL 



Darling Range 

Bauxite operations in the Darting Range area of Western 
Australia include the Jarrahdale, Huntly, and Del Park Mines 
and the deposit being developed at Mount William. The 
Darling Range bauxite is essentially an alumina-rich laterite 
with a variable content of iron oxides and quartz. Believed 
to be of Tertiary age, these bauxites have been derived from 
the basement granites by a process of leaching and 
redistribution of the dissolved minerals by ground water. 
Subsequent removal of excess iron and silica from the parent 
laterite was effected by good drainage. 

These bauxitic laterites form a discontinuous surface 
horizon with the higher grade deposits occurring on a 
dissected peneplain between 250 and 300 m above sea 
level. Individual ore bodies range in size from less than 
100,000 tons to more than 4 million tons. The, average 
thickness of the bauxite is 4.5 m, overlain by about 0.5 m of 
gravelly overburden. A typical bauxite profile consists of a 
hardcap averaging 1 m in depth underlain by a friable zone 
which passes abruptly into decomposed bedrock. Numerous 
diabase dikes throughout the Darling Range, and their 
intrusion into ore bodies, make mining-grade control and 
development extremely complex. 

The Darling Range bauxites consist essentially of hydrated 
iron and aluminum oxides and quartz in varying proportions. 
The principal alumina mineral is gibbsite with boehmite 
occurring as a minor mineral. Suggested is a progressive 
increase in kaolinite and quartz with depth, with a 
corresponding decrease in gibbsite and goethite. The Darling 
Range bauxites are of a lower grade than many other major 
deposits. Individual ore bodies include material ranging from 
25 to 45 pet available alumina, with mean values of 30 to 35 
pet. Reactive silica averages between 1 and 2 pet. Although 
the Darling Range bauxites are of relatively low grade, they 
are close to existing refineries and the port at Perth. 

Welpa 

The Weipa operation is on the western side of the Cape 
York Peninsula in Northern Queensland. The Cape York 
Peninsula comprises the northern end of a regional anticlinal 
trend, with Mesozoic and younger sediments being gently 
arched around a central core of older basement rock. 
Occurring mainly on the western limb of the regional fold, the 
aluminous laterite is developed on arkosic sands, clays, and 
siltstones of probable Tertiary age. The aluminous laterites 
are almost entirely restricted to the thicker Tertiary sediments 
close to the present coastline. Farther inland, where older 
sediments are involved, the laterite profiles are nonbauxitic. 

The pisolitic Weipa bauxites are mainly free flowing when 
mined, but can be weakly to strongly cemented. Cementation 
occurs locally as cap rock up to 1 m thick. Some local zones 
of cementation occur in the lower part of the ore body as 
irregular blocks or bars, but generally the bauxite is loose and 
friable; minor occurences are of an earthy form. Pisolites are 
from less than 1 mm to 20 mm in diameter and generally held 
in a losse sandy, clayey matrix. The bauxite has a thin 
overburden of soil, generally less than 1 m in thickness. 

The bauxite occurs as a series of flat-lying to gently dipping 
surface deposits averaging 2.4 m in thickness, with 
overburden ranging from 0.5 to 1 m. The bauxite consists 
almost exclusively of the ore minerals gibbsite and boehmite 
plus gangue minerals hematite, goethite, kaolinite, quartz, 
and anatase. 



Trombetas, Paragominas, and 
Almelrim Deposits 

On the northern side of the lower Amazon Basin 
bauxite-source rocks of continental origin form a youthful 
topographic surface characterized by isolated, jungle- 
covered, and highly dissected plateaus. Extending along the 
northern side of the Amazon River from Oriximina to the Jari 
River, these plateaus have a relief of 70 to 120 m with side 
slopes of about 30°. They are flat topped with a dip of 1° to 5° 
towards the Amazon and dissected by youthful streams 
whose courses are partly contolled by regional jointing. The 
bauxite-source rocks are Pliocene or f^lio-Pleistocene in age. 

Bauxitization is believed to have resulted from extreme 
leaching of preexisting rock material by downward- 
percolating meteroic water. The necessary environmental 
conditions include a moist climate, temperature in excess of 
25° C, and free water circulation in aluminous rock above a 
permanent water table. The general source-rock lithology is 
described as poorly consolidated clays, shales, and sands, 
sometimes containing coarser layers and beds with pebbles 
of various sizes. Not always well rounded, the pebbles are 
composed principally of varicolored quartz and crystalline 
rock fragments. The beds are generally horizontal, but 
occasionally inclined, and the strata are commonly cross 
bedded. Nodules, concretions, and iron staining are conspi- 
cuous in outcrops. 

The mineralogy consists essentially of kaolin, quartz, 
hydrated iron oxides, and gibbsite. Kaolin-type clay minerals 
are dominant and are locally present in thick beds of high 
purity. Quartz is abundant in iron-cemented sand, in 
conglomerate layers, and as dispersed grains in a clay 
matrix. The quartz grains are poorly sorted, clear, and 
subangular to angular. Hydrated amorphous iron oxides are 
abundant as coloring agents and cements throughout the 
section. Iron oxides also form a 1- to 2-m-thick amorphous 
iron laterite layer 5 to 10 m below the plateau level. Gibbsite, 
sparsely distributed through the upper portions of the 
section, is concentrated into a potential ore horizon 0.5 to 1 .5 
m thick below the iron laterite. Barite, tourmaline, and zircon 
are found among the heavy minerals, together with lesser 
amounts of anatase, garnet, rutile, and staurolite. 

The parent rock is kaolinitic sedimentary materials, and the 
only possible bauxitization route is by desilication to yield 
gibbsite. This genesis is consistent with the stratigraphy of 
the deposits, which clearly show bauxite layers formed as an 
enriched zone at the base of a thick weathering profile. 



GUINEA 

Boke Region (Sangaredl) 

The Boke deposits are part of a structural-morphologic 
alignment which trends south-southwest from Guinea-Bissau 
to the Boke region, and further to the Konkoure near Fria and 
to Kindia. In the Boke region, a number of bauxite deposits 
occur on both sides of the Cogon River. The bauxite is 
usually covered by a ferruginous crust and grades downward 
into ferruginous laterite. The ferruginous laterite lies either on 
fresh dolerite or on a layer of veriegated clay and 
decomposed rock 9 m or more thick. The basement rocks 
may consist of paleozoic sandstone, siltstone, or shale or 
their metamorphosed equivalents. 



31 



The Sangaredi deposit is a plateau of solid bauxite up to 30 
m thick and about 1.5 km wide in all directions. The eastern 
and southern slopes are steep, and the northern and western 
flanks slope gently to the surrounding countryside of low hills 
and plateaus. The mineralization in the Boke region consists 
mainly of gibbsite and hematite, with minor amounts of 
boehmite, goethite, kaolinite, and quartz. Boehmite, compris- 
ing as much as 4 to 5 pet of the bauxite at the surface, is 
believed to have been formed by dehydration of a more 
hydrous form of aluminum by the tropical sun. The minor 
quartz in the laterites commonly decreases in quantity with 
depth. Kaolinite, probably a major constituent of the clay-rich 
layer below the laterite, is most abundant in the lower parts of 
the laterite. 

Tougue 

The bauxite deposits at Tougue formed on diabase sills 
and dikes of Mesozoic age. These rocks overlie and intrude 
Paleozoic and Proterozoic conglomerates, sandstones, 
siltstones, shales, argillites, and archean gneisses. The 
section of the Fouta Djallon Palteau on which the Tougue 
deposits are located was uplifted and eroded during the early 
Cenozoic (African) orogeny. Bauxitization probably occurred 
during the quieter Miocene period in a humid tropical 
environment. 

The laterite profile at Tougue, 20 to 53 m thick, consists of 
an upper layer of fragmental ferruginous laterite that may be 
up to 10 m thick on stream divides, a zone of aluminous 
laterite as much as 13 m thick, and an underlying unit of 
lithomarge often more than 30 m thick. 

Individual bauxite deposits at Tougue range from 8 to 24 
km^ areally. The average thickness is 8 to 1 m. The deposits 
mantle the hills and ridges. The principal bauxite mineral at 
Tougue is gibbsite; the gangue minerals consist of goethite, 
hematite, and quartz. 

Dabola 

The Dabola bauxite deposits formed on Mesozoic diabase 
sills and dikes and on Precambrian granites, schists, and 
gneisses. The section of the Fouta Djallon Plateau on which 
these deposits occur was uplifted and eroded to a peneplain 
during the early Cenozoic (African) orogeny. Laterization 
occurred during the quieter Miocene period in a humid 
tropical environment. Twenty to 68 m thick, the laterite profile 
at Dabola consists of as much as 18 m of fragmental 
ferruginous laterite and bauxite and an underlying zone of 
lithomarge up to 50 m thick. 

The principal ore mineral is gibbsite. Boehmite, the 
monohydrate bauxite mineral, comprises only 1 1 pet of the 
total alumina content in the Dabola deposits. Major gangue 
minerals are goethite, hematite, and quartz. 

Guyana 

Guyana deposits are similar to those found on the opposite 
side of the Atlantic on Africa's Gold Coast. The two regions 
have the same climatic conditions and latitude, and both 
overlie residual clays produced from weathering of Precam- 
brian crystalline basement rocks. The West African deposits, 
however, are at a much higher elevation and have practically 
no overburden. The Guyana bauxites are believed to be 
eroded remnants of an Prepliocene peneplain which was 



later downwarped. It is believed that bauxite peneplains were 
covered with the Berbice Formation of unconsolidated deltaic 
clays, sands, and lignites during the Pliocene or Pleistocene 
age. 

The near-horizontal ore zones, which range in thickness 
from a few meters to 15 m, are usually capped with material 
produced by weathering and ground water movement. The 
0.3- to 2-m cap is not considered ore because its silica 
content is greater than 10 pet. It is, however, used for road 
construction. 

The principal ore mineral in Guyana bauxite deposits is 
gibbsite (trihydrate) with minor amounts of boehmite 
(monohydrate). Gangue minerals in the economic zones are 
limited to silica. The alumina content in Guyana deposits is 
estimated to average about 59 pet. 

JAMAICA 

The bauxite deposits in Jamaica occur primarily as 
infillings in vertical walled depressions formed by the 
coalescence of cylindrical vertical pipes in the highly 
fractured white limestone. The location and orientation of the 
deposits reflect the fault systems and lineation in the White 
Limestone Formation. The deposits are generally at the 
surface, except in a limited number of down-faulted valleys. 
The principal ore mineral in Jamaica is gibbsite with minor 
boehmite. Gangue minerals include iron oxides, kaolin, 
phosphorite, and silica. 



SURINAME 

Two types of bauxite deposits are the coastal-plain 
bauxites and the plateau bauxites. The most important 
features are generally the same for all occurrences in the 
coastal plain, with the exception of a few deposits buried 
under postbauxite sediments. The coastal-plain bauxite 
deposits occur stratigraphically on top of the Onverdacht 
Formation. The bauxitic layer is believed to have been an 
arkosic or silty material with a grain size and porosity greater 
than those of the underlying kaolinitic clays. Slightly domed, 
the bauxite layer tends to be undulating, varying in thickness 
(2 to 12 m), and wedging at the ends. The generally exposed 
bauxite deposits near Moengo occur on low hills 10 to 60 m 
high. Near Onverdacht, the deposits generally plunge 
northwards beneath younger sediments down to a depth of 
45 m. 

The major bauxite occurrences in the basement area are in 
the Lely and Nassau Mountains in eastern Suriname, 
Brownsberg in the northeast central part, and the Bakhuis 
Mountains in the west. The parent rocks are of basaltic to 
gabbroic composition in eastern Suriname and are anortho- 
site, leuco gabbronorites, and enderbites in the Bakhuis 
Mountains. The bauxite deposits in the Nassau Mountains 
occur as horizontal to gently sloping parts of plateaus that 
mostly coincide with swampy areas. Overburden consists of 
a topsoil with a humus-rich lateritic clay. In the Bakhuis 
Mountains, the bauxite, frequently found on steep slopes in 
this area, occurs as lensoid bodies and irregular masses 
within the lateritic crusts. 

The principal ore mineral of Suriname bauxite is gibbsite. 
The gangue minerals include clays, iron oxides, and silica. 



^U.S. GOVERNMENT PRINTING OFFICE: 1983-605-015/08 



INT.-BU.OF MINES, PGH., PA. 26719 




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